Foxconn: Apple Has Capacity to Make All US-Bound iPhones Outside of China if Needed

Apple manufacturing partner Foxconn says it has enough capacity to make all iPhones bound for the U.S. market outside of China if the current trade war between the two countries intensifies.


That's according to Foxconn board nominee and semiconductor division chief Young Liu, who made the comments at an investor briefing in Taipei on Tuesday, reports Bloomberg.

As the U.S.-China trade war gets more unpredictable, Foxconn – also known as Hon Hai – will "fully support Apple if it needs to adjust its production," he said.
"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."
Liu conceded that Apple has not given its Taiwanese partner instructions to move production out of China, but he said Foxconn is "capable of moving lines elsewhere according to customers' need."

The Hon Hai senior executive said it will respond swiftly and rely on localized manufacturing in response to the trade war, just as it saw the need to have a base in the U.S. two years ago before the trade dispute began.

Foxconn has been considering expanding its production plants in India as a way to diversify its supply chain away from China, where most of the Taiwan-based firm's facilities currently reside.

Apple manufactures most of its iPhones through Foxconn, but the latter's growing India base provides security in the face of Apple's vulnerability to rising U.S.-China tensions over trade and technology.

Foxconn already has plants in India, and in late 2017 it was reported that the firm would invest around $356 million to expand its facilities there to begin assembling Apple's high-end iPhones. Manufacturing iPhones in India could help Apple lower prices by allowing it to avoid a tariff that adds 20 percent to devices imported from China.

Tag: Foxconn

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18 weeks ago
Headline: "Foxconn: Apple Has Capacity to Make All US-Bound iPhones Outside of China if Needed"

The buried lede: "They'll pick a different low-wage country instead."

(You might infer from the headline that they'll simply make a US-bound iPhone in, I dunno, the US. Nope.)
Rating: 6 Votes
Avatar
18 weeks ago

Headline: "Foxconn: Apple Has Capacity to Make All US-Bound iPhones Outside of China if Needed"

The buried lede: "They'll pick a different low-wage country instead."

(You might infer from the headline that they'll simply make a US-bound iPhone in, I dunno, the US. Nope.)

They’re not stupid. That would double the price of a $1000 device
Rating: 6 Votes
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18 weeks ago
Good for Apple. Must have been Tim Cook supply chain guru that positioned them so well for this.
Rating: 5 Votes
Avatar
18 weeks ago

Headline: "Foxconn: Apple Has Capacity to Make All US-Bound iPhones Outside of China if Needed"

The buried lede: "They'll pick a different low-wage country instead."

(You might infer from the headline that they'll simply make a US-bound iPhone in, I dunno, the US. Nope.)


i don't understand. Why would anyone expect them to be made in the US when they could be made in many other cheaper countries instead?

Do you always pay extra for nationalism?

in particular, I'd expect them to be made in Vietnam. I don't expect them to be made in India, due to that countries protectionist trade policies.
Rating: 4 Votes
Avatar
18 weeks ago

If only it were as easily done as it is said. If new tariffs on China start on July 1, it would take Foxconn months to shift production from China to India. Additionally, they would have to retool new factories for the 2019 versions of the iPhone in the midst of the production line move, as I’m sure the retooling process has already started in China. Foxconn is not going to spend all this money without charging Apple for it, and that charge will be enormous.

The new tariffs going in effect on July 1 would severely damage the Apple’s 2019 holiday season sales. There will be a shortage of Indian-made iPhones for the holiday season, and the Chinese made iPhones would be significantly more expensive due to the tariffs.

Let’s hope Tim has negotiated to save Apple from the tariffs, as it won’t be pretty if the Apple products become subject to the tariffs. Tim is playing with fire, being so nonchalant about what may be a serious hit to the future of Apple and being unprepared for what’s about to come even though he was warned about it over 2 1/2 years ago. Had he heeded the warnings then, Apple would have been much better positioned now to weather the trade war with China.


What you miss here is that Apple owns the tooling and can easily ship the tooling to any other factory. So down time would be very limited. Not to mention that Apple already has factories established in other areas with the current tooling.

It also already has inventory of phones in the US that would help to bridge any gap in those timelines. That is what smart supply chain/inventory management does.

Apple can make this change at the drop of a hat.
Rating: 4 Votes
Avatar
18 weeks ago

Headline: "Foxconn: Apple Has Capacity to Make All US-Bound iPhones Outside of China if Needed"

The buried lede: "They'll pick a different low-wage country instead."

(You might infer from the headline that they'll simply make a US-bound iPhone in, I dunno, the US. Nope.)

Good for them. Would you pay $10 for something you can get for $5? No. It makes no logical sense.
Rating: 4 Votes
Avatar
18 weeks ago
Moderator Note:

If you want to discuss the politics behind the U.S.-China trade war, please take it to the PRSI forum (https://forums.macrumors.com/forums/politics-religion-social-issues.47/).
Rating: 3 Votes
Avatar
18 weeks ago

Moderator Note:

If you want to discuss the politics behind the U.S.-China trade war, please take it to the PRSI forum ('https://forums.macrumors.com/forums/politics-religion-social-issues.47/').

Maybe, this shall have been in the PRSI to begin with?
Since the “trade war” is already mentioned in the first sentence of the article?

On the other hand, I am doubtful that they are just gonna move the manufacturing with this reason alone.
Rating: 3 Votes
Avatar
18 weeks ago
You guys didn’t think a supply chain genius would have all his eggs in China, right?
[doublepost=1560263280][/doublepost]

Headline: "Foxconn: Apple Has Capacity to Make All US-Bound iPhones Outside of China if Needed"

The buried lede: "They'll pick a different low-wage country instead."

(You might infer from the headline that they'll simply make a US-bound iPhone in, I dunno, the US. Nope.)

Come on man. The iPhone can’t be made in the US in a way that makes economic sense and there are a myriad of practical issues as well. You think the US has the labor force to produce electronics at this scale? We can’t even get people to fill unskilled labor positions because so many are lazy and think they are management material.
Rating: 3 Votes
Avatar
18 weeks ago
If only it were as easily done as it is said. If new tariffs on China start on July 1, it would take Foxconn months to shift production from China to India. Additionally, they would have to retool new factories for the 2019 versions of the iPhone in the midst of the production line move, as I’m sure the retooling process has already started in China. Foxconn is not going to spend all this money without charging Apple for it, and that charge will be enormous.

The new tariffs going in effect on July 1 would severely damage the Apple’s 2019 holiday season sales. There will be a shortage of Indian-made iPhones for the holiday season, and the Chinese made iPhones would be significantly more expensive due to the tariffs.

Let’s hope Tim has negotiated to save Apple from the tariffs, as it won’t be pretty if the Apple products become subject to the tariffs. Tim is playing with fire, being so nonchalant about what may be a serious hit to the future of Apple and being unprepared for what’s about to come even though he was warned about it over 2 1/2 years ago. Had he heeded the warnings then, Apple would have been much better positioned now to weather the trade war with China.
Rating: 2 Votes
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