Foxconn sets up global business base in China

Foxconn Technology Group has opened a new global business base in central China’s Henan province, where the Taiwanese company already runs the world’s largest iPhone plant, as it reaffirms its commitment to the Chinese market amid increasing moves by Apple’s suppliers to diversify their supply chains.

An opening ceremony, held on Tuesday in Henan’s capital Zhengzhou, was attended by provincial Communist Party secretary Lou Yangsheng, provincial governor Wang Kai, and Foxconn CEO and chairman Liu Young-way, according to a news report by the government-backed Henan Daily.

The centre will focus mainly on applying new technologies in Foxconn’s business, formulating development plans, researching core technologies, and incubating new projects, the report said, adding that provincial authorities have pledged their “full support for Foxconn and its upstream and downstream partners along the supply chain”.

Foxconn’s development strategy is “highly consistent” with Henan’s “10 strategies”, which include driving growth through innovation and digitisation, and the two parties have signed a new round of strategic collaboration agreements, the report said.

While Foxconn has been Apple’s biggest contract manufacturer, its production activity in Zhengzhou, known as iPhone city, suffered major disruptions last year after a Covid-19 outbreak led to mass walkouts and worker protests over stringent pandemic controls and wages.

The debacle caused shipment delays for the iPhone during last year’s holiday season in Apple’s home market as well as Europe, prompting the Californian giant to accelerate the move of some production outside China.

Foxconn, known formally as Hon Hai Precision Industry, is reportedly planning a new plant to make iPhone components in India, where it is also building a new factory to produce AirPods.

India is expected to assemble up to half of Apple’s iPhones by 2027, up from less than 5 per cent this year, according to a forecast by Taiwan’s DigiTimes Research in January. That would put the scale of production on par with China, the report said.

Apart from India, Foxconn also secured a new site in Vietnam in February to meet “operational needs and expand production capacity”.

As Apple ramped up production outside China, Henan’s party secretary Lou went on a charm offensive in February to convince Foxconn to “take root” in the province and assure the company that the government would provide full support to its local operations.

Despite Apple’s push to reduce reliance on China-based factories, some of its suppliers have expressed concerns over the cost of relocation, the Post reported last month.

China also remains a key consumer market for Apple. CEO Tim Cook last month met Chinese premier Li Qiang and other top officials at an economic summit in Beijing, where he characterised the company’s relationship with the country as “symbiotic”. South China Morning Post