Apple supplier Foxconn expands India iPhone production, further diversifying supply chain away from mainland China

Apple supplier Foxconn expands India iPhone production, further diversifying supply chain away from mainland China

Apple supplier Foxconn Technology Group is reportedly adding additional iPhone production capacity to an existing factory in India as part of its push to diversify its supply chain beyond China.

Taiwan-based Foxconn, the world’s largest electronics contract manufacturer, will soon start phone production in a new building at an existing factory near Chennai, the capital of the southern Indian state of Tamil Nadu. , according to local media. economic timesciting anonymous sources.

The move follows the company’s hiring spree in the country in recent weeks, according to the report.

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Foxconn did not immediately respond to a request for comment.

Shares of Foxconn rose 1.2 percent in Shanghai to 9.5 yuan ($1.40) and 1.5 percent in Taipei to TW$48.70 ($1.60) on Friday for the morning. Its Hong Kong-listed unit, FIH Mobile, fell nearly 1 percent to HK$1.03 (13 US cents).

In recent years, Apple and Foxconn have stepped up efforts to expand their supply chains outside mainland China, especially in India and Vietnam, which incentivize local production. Supply chains have faced a turbulent couple of years amid disruptions from the Covid-19 pandemic and geopolitical conflicts.

Foxconn has established more than 40 industrial parks in mainland China, according to its website, more than in any other country. But frequent pandemic shutdowns and other disasters have slowed production. Amid small outbreaks in Shenzhen this year, the company’s campuses in the city were twice forced to work in a “closed loop,” a policy in China that requires employees to live and work on company premises. for factories to stay open.

Foxconn’s three compounds in Zhengzhou, in the central province of Henan, suspended the recruitment of new workers in May after the local government imposed a seven-day lockdown as part of Covid-19 control measures. The combined capacity of these facilities makes the city the largest iPhone manufacturer in the world.

Men ride motorcycles past a closed Foxconn plant in Chennai, India, which makes iPhones for Apple, on December 21, 2021. Photo: Reuters alt=Men ride motorcycles past a closed Foxconn plant in Chennai, India, on December 21, 2021. which makes iPhones for Apple, on December 21, 2021. Photo: Reuters>

Two of those Zhengzhou facilities were also affected last summer by the catastrophic flooding that hit the province, causing tens of thousands of Foxconn workers to have to stop working.

Amidst these setbacks and increasing trade restrictions from the US, Foxconn has remained committed to manufacturing in mainland China, a critical part of the global electronics supply chain. However, new geopolitical tensions between Taipei and Beijing threaten to create more headaches for Taiwanese companies.

After US House Speaker Nancy Pelosi visited the island and met with President Tsai Ing-wen, Beijing deployed the People’s Liberation Army around the island and embarked on drills with live fire that interrupted maritime and air traffic. It also banned the import of certain fish and fruit and stopped the export of sand, which is used for construction projects.

Foxconn has been looking to increase its presence in India for years. In 2015, the company said it would build 12 factories in the country, employing nearly 1 million workers. It currently has just one plant near Chennai, sometimes known as the “Detroit of Asia” because of its industrial base.

Late last year, the plant was temporarily closed after worker protests over food safety. Production lines reopened in January.

Also last year, Vietnam approved a plan for Foxconn to build a $270 million plant that would produce laptops and tablets. The company said it had invested $1.5 billion in the country by the end of 2020 and would invest another $700 million in 2021. The company said last year that its goal is to reach $40 billion in revenue in the country. from Southeast Asia within three to five years.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for over a century. For more SCMP stories, explore the SCMP app or visit SCMP’s Facebook and Twitter pages Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

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