Sino-US trade war: Foxconn to shift some Apple production from China to Vietnam

Foxconn is planning to shift its assembling facilities from China to Vietnam. (Bloomberg Photo)

Apple is planning to diversify its location of facilities to reduce the impact of Sino-U.S trade war. Hence Foxconn that manufactures iPads and other Apple devices is planning to shift its assembling facilities from China to Vietnam at Apple Inc request, said a person close to the development.

According to a report by Reuters, Foxconn is building assembling facilities for Apple tabs and MacBooks at a plant in Bac Giang province, northeast of Vietnam. The plant will come online in the first half of 2021. The informer who did not want to be identified also said that the assembly line in Vietnam will also take some production from China without elaborating on how much.

The development comes as over the outgoing Donald Trump administration pressing US firms to shift production facilities from China to other Asian countries. The Trump administration restricted the supply of electronic components produced with U.S technology to Chinese firms that it finds to be a risk to national security and imposed higher import tariff on made-in-China electronics.

Hence Taiwanese manufacturer who does not want to be a pawn to the trade war wants to move their production facilities from China to Mexico, Vietnam and India. Shifting production to Vietnam will make the company’s first time setting up a plant outside China. The manufacturing giant is also planning to invest $1 billion to expand its iPhone assembly line in India as ‘strongly requested’ by Apple Inc, the unidentified source further said.

Foxconn, however, citing commercial sensitivity and company policy refused to comment on the news of shifting assembly line out of China. Apple to did not immediately respond to Reuters.

Foxconn, formally Hon Hai Precision Industry Co Ltd the Taiwanese multinational electronics contract manufacturer recently announced it will set up a new subsidiary called FuKang Technology Co Ltd as a part of their $270 million investment to diversify production beyond China. Television sets for clients including Japan’s Sony Corp will also me manufactured at its Vietnam plant with production slated for early 2021.

Foxconn Chairman Liu Young-way had earlier told investors in August how he aims at providing two sets of supply chains will Sino-U.S trade wars impacting their business. The company’s competitors like Pegatron Corp also an assembler for Apple Inc to diversify its facilities by building plants in Mexico.

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