"China's the days as the world's factory are over," said the head of the largest iPhone manufacturer

Relocation to India and Vietnam is accelerating.

Engadget JP (Translation)
Engadget JP (Translation) , @Engadget_MT
2020年08月14日, 午後 03:06 in egmt
A logo sign outside of an office building occupied by Foxconn in Milwaukee, Wisconsin on June 22, 2018. (Photo by Kristoffer Tripplaar/Sipa USA)

This article is based on an article from the Japanese edition of Engadget and was created using the translation tool Deepl.

The Foxconn Group, which is responsible for the assembly of iPhones and other products, is one of Apple's largest supply chain partners.

Just when it was reported that mass production of the next flagship iPhone 12 series will begin in earnest at the group's Chinese factory, the chairman of the group's core company, Hon Hai Precision Industry, reportedly said that the days of China being the world's factory are over.

According to Bloomberg, Hung Hai's chairman Young Liu said, "No matter if it’s India, Southeast Asia or the Americas, there will be a manufacturing ecosystem in each," and China will play an important role for Foxconn, adding the country’s “days as the world’s factory are done.”

Foxconn's manufacturing capacity outside of China is 30 percent of its total capacity, up from 25 percent as of last June, Bloomberg also reported. The company is one of the major Apple suppliers that has rebuilt its production system, which has been focused on China, and is focusing on expanding its operations in India and Vietnam.

Already in June last year, Apple reportedly asked its major suppliers to consider the possibility of moving production to Southeast Asia in the wake of the then growing trade conflict between the U.S. and China, and it appears to be paying off.

Foxconn's major customer, Huawei, had only disappointing sales outside of China due to US sanctions, while another major customer, China's Xiaomi, also received a rebound in the Indian market, where tensions with China are rising. It seems that there is a rush to "de-China factory" not only at Apple's request, i.e. to avoid tariffs against China in the US market, but also to recover sales in other global markets.

With the U.S. government's policy of shutting out Chinese products, including apps, reliance on Chinese manufacturing capacity is becoming a major risk for companies in countries with the U.S. market. Japanese companies, like Foxconn, may have no choice but to accelerate the relocation of their production bases outside of China.

Source: Bloomberg

This article is based on an article from the Japanese edition of Engadget and was created using the translation tool Deepl. The Japanese edition of Engadget does not guarantee the accuracy or reliability of this article.

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