Foxconn shift some Apple production to Vietnam to minimize China risk
The advent of the global pandemic has already destabilized the economic condition around the world that might take years to repair and heal. And, amidst such a crisis tension between America and the Republic of China increases as former US President Donald Trump openly blames China for the novel coronavirus. With Trump’s exit from the White House and Joe Biden’s incoming administration, the intensity of impact due to the Sino-American conflict depends on how America can sustain and strengthen its competitive advantages.
But, keeping in mind that the impact of the Sino-US war can fall heavy on the businesses, Foxconn is moving a part of iPad and MacBook assembly to Vietnam from China. The decision has been taken at the request of Apple Inc. This way the company can both minimize the effect of the Sino-American war in its production and business and expand the Vietnamese market. The plant in Vietnam is expected to come online in the first half of 2021.
Foxconn Taking production out of China
Under Trump’s administration, he has repeatedly asked the US firms to take their production out of China. The relationship between the two nations in terms of trading and beyond has gone stale especially after the open accusation. Few months after the outbreak of COVID 19, Trump also decided the ban TikTok as it was responsible for data theft by the Chinese government. He further made some amendments to Clean Network System so that the privacy of every US citizen is protected. Trump didn’t only stop at this as United Nations especially targeted the made in China electronics for higher import tariffs. A restriction in the trade for products using US technology to supply in China was made as it put the nation at risk. No business wants to get caught up in this nasty trade war which can be the end of their market. So, some other Taiwanese manufacturers are also planning to shift some of their production units to countries like Vietnam, India, and Mexico.
Foxconn plan for Apple
Currently, Foxconn is planning to shift the assembly lines for Apple’s iPad tablet and MacBook laptop to the northeastern Vietnamese plant in Bac Giang province. The company has started building the assembly lines as announced in July of this year and will start production by the first half of next year. The source of this news is anonymous as the plan of Foxconn in the Vietnamese market is private. But, the company has not been clear about the fraction of production it is planning to take out of China. The person though has informed that Foxconn is doing this at Apple’s request as the latter wants to “diversify production following the trade war”. So, to support the Vietnamese expansion, Foxconn announced an investment of $270 million to open a new subsidiary called FuKang Technology.
Foxconn has denied commenting on the details about the plan. The company said that due to the reasons of commercial sensitivity they will not comment on any aspect of work revolving around its customers. Apple didn’t choose to make any comments either. Shifting the production of China will also mark a date in history for Foxconn as this will be the first time the company will not assemble iPad in China.
Products other than iPad and MacBook
News has spread that the production in the Vietnamese plant will go beyond Apple’s products. The contract manufacturer has plans to assemble television sets in this new plant for Sony. The production is scheduled for late 2020 to early 2021. But, Sony has declined to comment. Foxconn has a plan to produce more than just Apple’s product meaning it might eventually have a good grip on the Vietnamese electronic market. The anonymous person has informed that the new plant will also manufacture computer keyboards.
Other Asian markets
Foxconn has planned to invest a handsome amount in the Indian market as well. The company has already made plans to spend up to $1 billion in India for iPhone assembly. Apple is requesting to expand business in other markets anywhere beyond China. And, India is a land that produces quality engineers every year. So, it is a smart move for Foxconn to invest such a bulky amount in India. The company is also considering building plants in Mexico.
Annasha Dey is an NIT student, who apart from studying engineering is also a content writer. She has a great interest in photography, writing, reading novels, and travelling as well. She is a foodie who loves socializing and hanging out with her friends. She is also a trained Kathak dancer and a big fashion enthusiast. Dey also loves watching TV series, which includes F.R.I.E.N.D.S. and Big Bang Theory. To be a better writer she prefers to read more