Foxconn: We can assemble 100% of Apple’s U.S. iPhones ex-China

From Bloomberg: “Apple’s U.S. iPhones Can All Be Made Outside of China If Needed,” posted Tuesday:

Hon Hai, known also as Foxconn, is the American giant’s most important manufacturing partner. It will fully support Apple if it needs to adjust its production as the U.S.-Chinese trade spat gets grimmer and more unpredictable, board nominee and semiconductor division chief Young Liu told an investor briefing in Taipei on Tuesday.

“Twenty-five percent of our production capacity is outside of China and we can help Apple respond to its needs in the U.S. market,” said Liu, adding that investments are now being made in India for Apple. “We have enough capacity to meet Apple’s demand.”

Apple has not given Hon Hai instructions to move production out of China, but it is capable of moving lines elsewhere according to customers’ needs, Liu added. The company will respond swiftly and rely on localized manufacturing in response to the trade war, just as it foresaw the need to build a base in the U.S. state of Wisconsin two years ago, he said.

My take: In the heat of U.S.-Chinese trade war, a strong signal has been sent. But to whom?

One Comment

  1. Jerry W Doyle said:
    “…. My take: In the heat of U.S.-Chinese trade war, a strong signal has been sent. But to whom?”

    I do not believe Apple is sending expressively a signal here other than exercising solid contingency planning. It is not Tim Cook’s mindset to swagger his position, but to work diligently to establish rapport with China to mitigate tensions. The purpose of the announcement could be directed to analysts and shareholders that Apple has proactively and continues to proactively deal with the vicissitudes surrounding the ongoing trade dispute between the two countries.

    Apple announced in a Chinese press release back in March 2017 that it supports 4.8 million jobs in China. Implicit in Hon Hai’s announcement is the potential loss of these Chinese jobs, if the nation decides to take some retaliatory action against Apple. I am confident, though, that the announcement is directed more at WS analysts and shareholders, and has nothing to do with alarming China.

    June 11, 2019

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