The chairman of Hon Hai Precision Industry, also known as Foxconn, has commented on the current political situation surrounding the trade war between the US and China after the latest quarterly figures were announced. Like Young Liu according to Bloomberg said he sees “China’s days as a world factory are numbered”.
By this, Liu means that non-Chinese companies like Foxconn, which manufactures for Apple, Dell and Nintendo among others, will have to look for other production markets in the future due to the punitive tariffs and trade bans imposed by the USA. At Foxconn, the proportion of production that does not take place in China has increased from 25 percent in June 2019 to 30 percent in June 2020.
“Whether in India, Southeast Asia or on the American continent – there will be a production ecosystem everywhere”said Liu. China will still play a key role in Foxconn’s production, but the increase in production outside the country is clear.
Foxconn faces Chinese competition
Foxconn has already looked for various strategies in the past to make its production less dependent on China. For example, some iPhone models are to be manufactured in India. The Chinese competition is also a problem for Foxconn: After taking over a former Wistron factory, Luxshare recommended itself as the future new iPhone manufacturer in China.
Luxshare is already building the Airpods wireless headphones for Apple. Spicy for Foxconn as a Taiwanese company: In order to be able to produce iPhones, Luxshare probably needs help from another Taiwanese company, Catcher Technologies.