Foxconn, which produces iPhones and Nintendo Switch, moved its manufacturing base outside China to “the era of China being the world's factory is over”

by iphonedigital

As the US-China trade war intensifies, a major Taiwanese supplier Foxconn (Hong Hai Science and Technology Group) that contracts with Apple and Nintendo will split the supply chain for a long time and plan to move part of it outside China It is reported that Foxconn Chairman Yang Liu commented, 'The days when China is the world's factory are over.'

China's Days as World's Factory Are Over, IPhone Maker Says-Bloomberg
https://www.bloomberg.com/authors/ATjxWD012Wk/debby-wu

Foxconn says China can no longer be 'the world's factory'-TechSpot
https://www.techspot.com/news/86350-foxconn-china-can-no-longer-world-factory.html

According to Bloomberg, Liu said, 'We will gradually shift the production bases of gadgets such as iPhones, Dell desktop PCs, and Nintendo Switch to outside of China.' In fact, 25% of Foxconn's production bases were outside China as of June 2019, but it has increased to 30% at the time of article creation.

The background behind Foxconn's move of production bases outside China is the US-China trade war that has continued since 2018, when the United States imposed additional tariff measures on China. Since the United States imposes high tariffs on electronic devices and electronic parts imported from China, and importing parts manufactured in China into the United States will be too costly, Foxconn has made India, Vietnam, the United States, Brazil, Mexico I would like to move the production base outside China.

India is investing $6.6 billion (about 700 billion yen) to attract iPhones in order to incorporate iPhone manufacturing into its own ecosystem. In fact, Foxconn announced in 2019 that it will make a new iPhone production base in India, and in May 2020 it is reported that Apple will move 20% of the iPhone production base from China to India. I am.

News that Apple will move 20% of iPhone production base from China to India-GIGAZINE

“While India, Southeast Asia and the Americas each have their own manufacturing bases, China still plays an important role in Foxxcon's business, but in an era when China becomes the world's factory,” said Liu. Is no longer done.'

It should be noted, Foxcon is as the net income of the second quarter of 2020 (April to June), about 700 million $ 8,000 increase 34 percent year-on-year (about 83 billion yen) recorded have been. The strong performance may be due to a large increase in demand for consumer and business devices due to the pandemic of the new coronavirus, while smartphone-related revenue decreased by 15% year-on-year. .. Foxconn expects smartphone-related revenues to decline 10% year-over-year in the third quarter of 2020 due to the delayed release of the iPhone 12 due to the pandemic.

Apple announces results for the third quarter of 2020, revealing that the release of the new iPhone will be delayed-GIGAZINE

However, Foxconn's production line in China is recovering from the effects of the new coronavirus, and it is reported that it is already working on expanding employment to manufacture the iPhone 12.