Thursday, 18 July, 2019

Foxconn can make all iPhones outside of China (if necessary)

Apple has sufficient iPhone production capacity outside China to meet the needs of the US market.                  Angela Lang  CNET Apple has sufficient iPhone production capacity outside China to meet the needs of the US market. Angela Lang CNET
Russell Knight | 12 June, 2019, 23:21

So far the biggest casualty in the trade war has been Chinese powerhouse Huawei.

Of course, Apple won't be able to do much if China restricts its iPhones from selling in the region, but as far as local production is concerned, Foxconn appears to think a backup plan is not that hard to execute.

Reports are emerging that in response to the current US-China trade war, Apple supplier Foxconn is prepared to move production of all iPhones meant for the US market, out of China. While it's not sure that whether it's to reduce the import duties in India or whether those phones would end up outside the country, India could be key player for Apple now.

Apple has already suffered a major dip in iPhone sales in recent years, this new tariff could lead to the extra cost passing on to the U.S. consumer, further pushing them to Apple's competitors notably Samsung. But Apple's iPhones and iPads are arguably the most important products manufactured by Foxconn in, you guessed it, China.

"Twenty-five per cent of our production capacity is outside of China and we can help Apple respond to its needs in the USA market", said Foxconn's semiconductor division chief Young Liu on Tuesday as reported by Bloomberg, "We have enough capacity to meet Apple's demand". "We have enough capacity to meet Apple's demand", Bloomberg reported.

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In his comments to investors, Liu said Apple had not given Hon Hai instructions to move production out of China.

Still, the vulnerability of tech assemblers and chip manufacturers to the trade war has already been established.

Worth noting that Foxconn also has a factory in Chennai, India, but now it only runs some tests and isn't manufacturing actual Apple devices.

Neither Apple nor Foxconn immediately responded to requests for comment. We don't think that Apple will keep a low profile if this starts to affect their business as well.

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