Η Foxconn, her biggest partner Apple, in their construction iPhone, is said to have ready plan to transfer all production from China, in the event that the US-China trade war escalates.
ΕIt is a fact that the Apple, is based in factories in China for the production of the iPhone, which is proven to be the product that contributes the most to the revenue of the American company. In this context, as they broadcast Bloomberg and the Wall Street Journal, the Hon Hai Precision Industry (or Foxconn) has the ability to ship all iPhone production outside of China if the raging trade war escalates.
The reports come in the wake of President Trump's announcement that he would add $ 300 billion in tariffs on Chinese goods if Chinese President Jin Ping does not attend the G20 summit in late June.
Ο Yang Liu, head of its processors sector Foxconn, based in Taiwan, said the company would support Apple if it needed to relocate production, giving the US company a viable alternative if China-US talks failed. «25% of Foxconn's production capacity is outside China and we can help Apple meet the needs of the US market"Liu told Bloomberg to add"we have enough capacity to meet demand on behalf of Apple».
It is worth noting that the Foxconn has already significantly increased its production infrastructure outside China, according to recent reports. In fact, the chairman of the board of Foxconn Technology Group had told Bloomberg in April that the iPhone would go into mass production in factories in India this year. Older iPhone models are already being made in Indian factories, but reports suggest that trial production of newer Apple models has already begun.
As he says Bloomberg, after the test production the factories will switch to complete production lines. In addition, last December, Reuters reported that Foxconn was considering setting up a new plant in Vietnam, considering the situation created by Sino-US relations. At the same time, the company plans to build a factory that will produce liquid crystal displays (LCD) in Wisconsin, USA, which will employ about 13.000 people. According to the Associated Press, the plant will be fully operational by 2020.
On the other hand, there are rumors that Foxconn's facility in China is simply too large to be relocated. The company's largest factory in China is 1,4 square miles and is called Foxconn City. At the same time, Foxconn's employees in mainland China number 1,3 million, according to the British Guardian.
It is indicative that analysts such as Daniel Ives of Wedbush Securities estimate that Apple at best will be able to move between 5-7% of the production of some iPhone models and transport them to production lines in India. "Apple has really 'bet' on production in China and at Foxconn factories," the analyst told Business Insider. "It would be like General Motors or Ford saying they were going to move from the greater Detroit area," says Daniel Ives.
In general, analysts predict that the tension in trade relations between the US and China could affect the production of the Apple iPhone. In May, Morgan Stanley analysts wrote in a note to their customers that the iPhone XS in particular would become more expensive to produce because of the Trump administration's increased tariff policy.
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