Published: Thu, June 13, 2019
Markets | By Otis Pena

Foxconn says ready to shift Apple production outside China

Foxconn says ready to shift Apple production outside China

The bigger picture: As risingUS-China tensions compel brands to look outside of China for manufacturing, the geographic concentration of the smartphone industry could be rebalanced.

For those who don't know, Hon Hai Precision (aka Foxconn Technology Group or just Foxconn) is now the world's largest contract manufacturing company.

Its semiconductor division chief Young Liu said that 25% of the production capacity is positioned outside of China and the company is ready to help Apple since it has enough capacity to meet the demand of the USA market.

At a Tuesday investor meeting in Taipei, Foxconn semiconductor chief Young Liu said that the company is ready to "fully support Apple if it needs to adjust its production".

The comments come as US President Donald Trump has threatened to slap further tariffs on US$300 billion worth of goods from China, where the bulk of Apple's devices are assembled.

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Liu said Foxconn has production facilities in 16 countries globally, and 25 percent of the company's production capacity is outside of China.

The firm has done work to make it easy to move its manufacturing to India swiftly in case of heavy restrictions being placed on Apple as a result of the escalating trade war.

However, Liu confirmed that Apple is yet to instruct Foxconn to move manufacture outside of China.

He added the project, which includes manufacturing of displays and servers, was poised to go into production by the end of next year. As for the localized production possibility, Foxconn has arranged to build a 13,000-worker facility in Wisconsin for more than United States dollars 4.5 Billion in government incentives.

On Tuesday, Liu also sought to address investors' concerns on what the overhaul might mean for plans initially laid out by Gou, including a $10 billion investment to create 13,000 jobs in the US state of Wisconsin.

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