Foxconn Technology Group, Apple’s leading iPhone assembler, plans to expand its production capacity between China and other countries. The update will help Foxconn’s price lists of the current China-U.S. industrial war and keep costs competitive to customers, analysts said.
Foxconn President Young Liu said Wednesday at an investor convention that the assembler would load the plant’s capacity outside China, while mentioning India, Southeast Asia and the Americas as conceivable places for technology giant operations, Bloomberg reports.
A contacted Foxconn spokesman on Thursday described the replacement as a geographical “division” of capacity, but said the company had not predicted its share of sites in China compared to those in other countries. Foxconn’s percentage of capacity outside China is now 30%, up from 25% in June 2019.
The company’s previous statements were “intended to provide the mind of our control team on the latest macroeconomic developments that have an effect on our corporate and global customer electronics industry,” Foxconn said.
Rising tensions have put generation corporations in the midst of an industrial war between the United States and China, disrupting chains of origin and threatening their primary markets.
The Taiwanese assembler, also known as Hon Hai Precision Industry, has begun “feasibility discussions for offshoring” in 2018 or early 2019, said Brady Wang, a Taipei analyst at Counterpoint Research. Almost all Taiwanese electronics contractors plan to follow U.S. price lists by installing factories or expanding production capacity outside China, he said. This departure began this year, Wang says, especially to India and Vietnam.
Foxconn plans a billion-dollar expansion at a plant in southern India, reportedly. It also aims to open a $10 billion demonstration plant in the US state of Wisconsin.
The company, which now operates in 16 countries, has withdrawn the maximum of its network appliances and server meetings from China since 2018. Dell, HP, Google and Tesla are Foxconn’s leading customers.
A capacity department between China and other countries may simply increase Foxconn’s costs, but generate revenue, Wang said. It would also make the supply of parts, materials and production to Foxconn’s business units “clearer”, says Tracy Tsai, Gartner’s vice president of studies in Taipei.
This week, Foxconn reported better-than-expected second-quarter results. Taipei-based company reported a net source of revenue of approximately $22.9 billion in New Taiwan ($778 million), a 34% jump from the same time last year. NT revenue $1.13 billion, however, Young warned that its sales in the next quarter would drop due to Apple’s release of his iPhone.
Terry Gou, Taiwan’s richest man, founded Foxconn forty-five years ago. He controlled it largely only until he resigned last year to lead a number one presidential crusade in Taiwan that ultimately failed. Foxconn has grown over the decades to become Apple’s leading entrepreneur, among other global computer brands.
As a journalist, I’ve covered everything since 1988, since my alma mater U.C. Berkeley at the Great Hall of the People in Beijing, where I followed the Communists
As a journalist, I’ve covered some of everything since 1988, since my alma mater U.C. Berkeley at The Great People’s Hall in Beijing, where I followed the communist leaders of Japanese news firm Kyodo. Working in Taipei since 2006, I have been tracking Taiwanese businesses and local economic trends that resonate abroad. In Reuters until 2010, I tried the island’s sensitive appointments with China. More recently, I have studied high-tech trends in Greater China and extended my news policy to surrounding Asia.