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.
Top Rated Comments
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.)
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.
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.