Foxconn Planning U.S. Expansion Alongside Apple's Push for Domestic Mac Production

Just as Apple CEO Tim Cook has revealed that Apple will be bringing some Mac production back to the United States next year, Bloomberg reports that Apple's manufacturing partner Foxconn is seeking to expand into the country.

“We are looking at doing more manufacturing in the U.S. because, in general, customers want more to be done there,” Louis Woo, a Foxconn spokesman, said in a phone interview. He declined to comment on individual clients or specific plans. [...]

“Supply chain is one of the big challenges for U.S. expansion,” Woo said. “In addition, any manufacturing we take back to the U.S. needs to leverage high-value engineering talent there in comparison to the low-cost labor of China.”

Neither Apple nor Foxconn has confirmed that the two companies will be working together on U.S. Mac production, but Cook noted that Apple's $100 million investment in domestic production would involve "working with people".

The moves by Apple and Foxconn to bring production to the United States demonstrate an evolution of the thinking held by Apple until very recently, which comes from a perspective that the U.S. labor force and supply chain simply aren't set up to handle the kind of nimble consumer electronics mass production available in China.

For Mr. Cook, the focus on Asia “came down to two things,” said one former high-ranking Apple executive. Factories in Asia “can scale up and down faster” and “Asian supply chains have surpassed what’s in the U.S.” The result is that “we can’t compete at this point,” the executive said. [...]

“The entire supply chain is in China now,” said another former high-ranking Apple executive. “You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.”

With Cook's announcement regarding domestic Mac production for 2013, the company is clearly testing the waters, perhaps with a low volume product like the Mac Pro, but the company faces major challenges if it wishes to bring operations on the scale of iPhone production to the United States.