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

Discussion in 'iOS Blog Discussion' started by MacRumors, Jun 11, 2019 at 3:15 AM.

  1. MacRumors macrumors bot


    Apr 12, 2001

    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.
    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.

    Article Link: Foxconn: Apple Has Capacity to Make All US-Bound iPhones Outside of China if Needed
  2. chucker23n1 macrumors 68020


    Dec 7, 2014
    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.)
  3. magicschoolbus macrumors 65816


    May 27, 2014
    Good for Apple. Must have been Tim Cook supply chain guru that positioned them so well for this.
  4. sirozha, Jun 11, 2019 at 4:09 AM
    Last edited by a moderator: Jun 11, 2019 at 5:06 AM

    sirozha macrumors 6502a

    Jan 4, 2008
    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.
  5. haruhiko macrumors 601


    Sep 29, 2009
  6. AustinIllini macrumors demi-goddess


    Oct 20, 2011
    Austin, TX
    They’re not stupid. That would double the price of a $1000 device
  7. OllyW Moderator


    Staff Member

    Oct 11, 2005
    The Black Country, England
    Moderator Note:

    If you want to discuss the politics behind the U.S.-China trade war, please take it to the PRSI forum.
  8. Mojohanna32 macrumors newbie


    Sep 26, 2018
    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.
  9. GrumpyMom macrumors 604


    Sep 11, 2014
    Way to go, Foxconn. I’m impressed to read how flexible they anticipate they will able to be. I hope it’s true.
  10. mozumder macrumors 6502a

    Mar 9, 2009
    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.
  11. nt5672 macrumors 68000

    Jun 30, 2007
    In the end China will give Foxconn a pass. They employ too many people.

    This statement is just a prelim to give the government a reason for a pass.
  12. chucker23n1 macrumors 68020


    Dec 7, 2014
    The first time I read the headline, I wondered "are they saying the US is an option?". Then I read the remainder of the article, and nope, they're not saying that. But given that they're not saying that, I find the whole headline misleading. It's not like they can't also make "Netherlands-bound" or "Australia-bound" iPhones in India.

    I'm not American, so I don't know what you're trying to say.
  13. Ted13 macrumors 6502a


    Dec 29, 2003
    Not clear what you mean - it is the US that will be charging the tariffs - how is China going to “give Foxconn a pass”?
    --- Post Merged, Jun 11, 2019 at 7:02 AM ---
    There is no chance that iPhone going to EU countries like the Netherlands will be assembled outside China - why would they? The EU isn’t charging tariffs.
    Also, I am always amused that of posters here, who aren’t posting their names, wanting to avoid mentioning what country they live in.
  14. JetTester macrumors 6502

    Feb 12, 2014
    Well done, Apple and Foxconn. Positioning to be able to handle unexpected challenges is a brilliant business move.
  15. cocky jeremy macrumors 601

    cocky jeremy

    Jul 12, 2008
    Columbus, OH
    Good for them. Would you pay $10 for something you can get for $5? No. It makes no logical sense.
  16. Baymowe335 macrumors 601

    Oct 6, 2017
    You guys didn’t think a supply chain genius would have all his eggs in China, right?
    --- Post Merged, Jun 11, 2019 at 7:28 AM ---
    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.
  17. pweicks macrumors regular


    Dec 23, 2016
  18. B4U macrumors 68010


    Oct 11, 2012
    Undisclosed location
    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.
  19. pika2000 macrumors 601

    Jun 22, 2007
    This is interesting. Does this mean the factories in countries like India are doing good enough in volume now? And Indonesia is probably next in line. Samsung has been making their flagship Galaxy S and Note phones locally in Indonesia for some time, so the local capability is there.
  20. chucker23n1 macrumors 68020


    Dec 7, 2014

    I live in Germany. That isn't really relevant to this thread beyond me not living in the US.
    --- Post Merged, Jun 11, 2019 at 7:56 AM ---
    I'm well aware of the complications. My assertion was merely that the headline was slightly misleading.

    …that's… really neither here nor there.
  21. Amacfa macrumors 68000


    May 22, 2009
    It’s pretty clear this is an attempt to avoid tariffs. Not sure why people think it would be coming to the US, as tariffs can be avoided by using any country but China.

    It’s simple, china is responsible for an estimated $300 billion in IP theft, that alone should warrant a manufacturing move.
  22. meccano macrumors newbie


    I find the wording of all this curious because when I read it my take is - Foxconn has Apple's back. Foxconn has the capacity outside of China to manufacture the iPhone. Apple (despite the wording to the contrary) has zero manufacturing capacity to make the iPhone anywhere. Foxconn is a Taiwan based company and is less threatened by China's retaliation for helping Apple move manufacturing out of PRC. Finally, despite protectionists policies of current US administration, Apple isn't able to make any hardware in this country because that ship has long ago sailed. Editorial note: Dah
  23. pweicks macrumors regular


    Dec 23, 2016
    I agree. Why the heck did MacRumors choose to not put this in a political category to begin with?
  24. Baymowe335 macrumors 601

    Oct 6, 2017
    Yes it can’t make the iPhone in the US today, period.
  25. chucker23n1 macrumors 68020


    Dec 7, 2014
    Yup. There isn’t really much to discuss on this story that isn’t political.

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