Apple's iPhone factory shift has left a ghost town behind in China

AppleInsider

Foxconn is closing factories in China as iPhone production moves elsewhere, and impacts beyond industry have been made crystal clear in a new video.

A Foxconn facility sign

Apple has long operated its production in China, but in recent years it has been shifting away. Production in India and Vietnam is growing, with fewer products being shipped out of China.

In a China Observer report released on Monday, footage of a Foxconn industrial park in Nanning is shown to be deserted. Once employing 50,000 people, it's now practically an empty shell. AppleInsider has learned that as Apple's operations have moved elsewhere, manufacturing capacity was freed elsewhere in China, leading to this plant's closure.

A local man told the report the plant required massive resources to go with its 50,000 employees. This included 60 tons of rice per day, as well as 280 pigs, 1.2 million eggs, and 80,000 chickens.

As well as the ghost town footage of the facility itself, the effects of the China exodus affected other nearby areas. Nearby skyscrapers built to house workers for the facility are struggling to make sales, even with steep discounts.

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There isn't much hope to locals that Foxconn will be using the operation again anytime soon, as signs have been taken down. It is believed that only a few buildings are being actively used by Foxconn, with the vast majority either vacant or rented out.

The facility rot and abandonment is certainly a sign that Foxconn made changes to its overall operations. Especially since Apple is keen to shift production away from a China-centric system to one more distributed.

Some of its overseas operations have even benefited from the closure. Report sources say equipment from the facilities were taken to similar factories in Vietnam.

For local communities, the closure demonstrates how much wealth Apple's production can bring to an area. It also shows how quickly it can go away, and without any other backup industries, how damaging the movements can be.

Update April 29, 4:27 PM ET Updated with details about Foxconn's move out of the area, and why.



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sbdude

Despite my best efforts, the only thing I can think to say is "good." The over-reliance on CCP-made goods was always tenuous at best, what with the CCP's relationship with Taiwan and the rest of the world, frankly.

badmonk

This also speaks to the trouble with the Chinese economy writ large.  I am sure this scene is being duplicated throughout China in other industries.

blastdoor

I remember when there was first talk of Apple diversifying production away from China — some people claimed it was impossible, or would take decades. 

Turns out it’s possible.

avon b7

Is this the plant? I can't watch the video right now.

It was very shortlived if it was that one and there could be penalisation clauses if it was built for Apple's needs and then Apple transferred production elsewhere.

If that project never got off the ground there could be other reasons afoot (apart from relocating production).

The only real way to gauge production output is a percentage of total China Apple output. 

tmay

BYD replaces Foxconn, and Huawei replaces Apple, which is wonderful for indigenous phone sales, but not so much for exports. It's hard to imagine that BYD and Huawei will be better for the workers and local economies than Foxconn and Apple, but that's what the PRC will end up with.

I appreciate that Apple is interested in adding more countries, like Indonesia, to its supply chain, while vacating a portion of its supply chain in China.

avon b7

tmay said:

BYD replaces Foxconn, and Huawei replaces Apple, which is wonderful for indigenous phone sales, but not so much for exports. It's hard to imagine that BYD and Huawei will be better for the workers and local economies than Foxconn and Apple, but that's what the PRC will end up with.

I appreciate that Apple is interested in adding more countries, like Indonesia, to its supply chain, while vacating a portion of its supply chain in China.

https://www.tomshardware.com/news/foxconn-reportedly-paying-huawei-workers-more-than-iphone-builders

Luis.A.Masanti

It is crazy! Foxconn shut down the factory…  but open others in India and other Easter countries.
Foxconn is still making money from Apple.

But in the title appears only ’Apple’… As usual: “Blaming Apple brings page views… aka ad revenues-”

tmay

avon b7 said:

tmay said:

BYD replaces Foxconn, and Huawei replaces Apple, which is wonderful for indigenous phone sales, but not so much for exports. It's hard to imagine that BYD and Huawei will be better for the workers and local economies than Foxconn and Apple, but that's what the PRC will end up with.

I appreciate that Apple is interested in adding more countries, like Indonesia, to its supply chain, while vacating a portion of its supply chain in China.

https://www.tomshardware.com/news/foxconn-reportedly-paying-huawei-workers-more-than-iphone-builders

Those offers to work on Huawei production lines were at peak production for Apple's iPhone 15, just after release in the U.S.

I doubt the conditions are the same today, but kudos to Foxconn/Huawei if they actually do pay better.

sflocal

avon b7 said:

tmay said:

BYD replaces Foxconn, and Huawei replaces Apple, which is wonderful for indigenous phone sales, but not so much for exports. It's hard to imagine that BYD and Huawei will be better for the workers and local economies than Foxconn and Apple, but that's what the PRC will end up with.

I appreciate that Apple is interested in adding more countries, like Indonesia, to its supply chain, while vacating a portion of its supply chain in China.

https://www.tomshardware.com/news/foxconn-reportedly-paying-huawei-workers-more-than-iphone-builders

From the article:"Xu told the SCMP that FIH employees are often paid higher but that the group that makes iPhones "typically offers better welfare programmes for workers than others," suggesting better benefits."

Nice try.

avon b7

sflocal said:

avon b7 said:

tmay said:

BYD replaces Foxconn, and Huawei replaces Apple, which is wonderful for indigenous phone sales, but not so much for exports. It's hard to imagine that BYD and Huawei will be better for the workers and local economies than Foxconn and Apple, but that's what the PRC will end up with.

I appreciate that Apple is interested in adding more countries, like Indonesia, to its supply chain, while vacating a portion of its supply chain in China.

https://www.tomshardware.com/news/foxconn-reportedly-paying-huawei-workers-more-than-iphone-builders

From the article:

"Xu told the SCMP that FIH employees are often paid higher but that the group that makes iPhones "typically offers better welfare programmes for workers than others," suggesting better benefits."

Nice try.

'often', 'suggesting'... Is vague at best but I have no issue with including all the article references. 

A 'nice try' would have seen me quote only the wages part. 

I simply countered the original claim with factual information: the higher wages. 

That's balance in the discussion. 

It's worth noting that benefits vs wages is often a trade-off situation but it's more likely that higher wages will stimulate the local area economies more than 'benefits'. 

sbdude

avon b7 said:

sflocal said:

avon b7 said:

tmay said:

BYD replaces Foxconn, and Huawei replaces Apple, which is wonderful for indigenous phone sales, but not so much for exports. It's hard to imagine that BYD and Huawei will be better for the workers and local economies than Foxconn and Apple, but that's what the PRC will end up with.

I appreciate that Apple is interested in adding more countries, like Indonesia, to its supply chain, while vacating a portion of its supply chain in China.

https://www.tomshardware.com/news/foxconn-reportedly-paying-huawei-workers-more-than-iphone-builders

From the article:

"Xu told the SCMP that FIH employees are often paid higher but that the group that makes iPhones "typically offers better welfare programmes for workers than others," suggesting better benefits."

Nice try.

'often', 'suggesting'... Is vague at best but I have no issue with including all the article references. 

A 'nice try' would have seen me quote only the wages part. 

I simply countered the original claim with factual information: the higher wages. 

That's balance in the discussion. 

It's worth noting that benefits vs wages is often a trade-off situation but it's more likely that higher wages will stimulate the local area economies more than 'benefits'. 

Yes, we've all seen what higher wages does to local economies. It's called inflation.

avon b7

sbdude said:

avon b7 said:

sflocal said:

avon b7 said:

tmay said:

BYD replaces Foxconn, and Huawei replaces Apple, which is wonderful for indigenous phone sales, but not so much for exports. It's hard to imagine that BYD and Huawei will be better for the workers and local economies than Foxconn and Apple, but that's what the PRC will end up with.

I appreciate that Apple is interested in adding more countries, like Indonesia, to its supply chain, while vacating a portion of its supply chain in China.

https://www.tomshardware.com/news/foxconn-reportedly-paying-huawei-workers-more-than-iphone-builders

From the article:

"Xu told the SCMP that FIH employees are often paid higher but that the group that makes iPhones "typically offers better welfare programmes for workers than others," suggesting better benefits."

Nice try.

'often', 'suggesting'... Is vague at best but I have no issue with including all the article references. 

A 'nice try' would have seen me quote only the wages part. 

I simply countered the original claim with factual information: the higher wages. 

That's balance in the discussion. 

It's worth noting that benefits vs wages is often a trade-off situation but it's more likely that higher wages will stimulate the local area economies more than 'benefits'. 

Yes, we've all seen what higher wages does to local economies. It's called inflation.

That’s debatable but I'd say in certain situations it increases the cost of living. Just look at Cork for example and the impact Apple and Google have had. 

Inflation though because of higher wages isn't as clear cut. Some say wages follow inflation and I think the Fed issued a report on this last year attributing 0.1% of a 3% rise in inflation to wages.

Ironically I am sitting on a train traveling home from Barcelona and not paying a cent. The train service is free this year (as it was last year) as an anti-inflationary measure and if anything, wages have been going down.

That's 1,000+ euros saved for me. 

tmay

avon b7 said:

sbdude said:

avon b7 said:

sflocal said:

avon b7 said:

tmay said:

BYD replaces Foxconn, and Huawei replaces Apple, which is wonderful for indigenous phone sales, but not so much for exports. It's hard to imagine that BYD and Huawei will be better for the workers and local economies than Foxconn and Apple, but that's what the PRC will end up with.

I appreciate that Apple is interested in adding more countries, like Indonesia, to its supply chain, while vacating a portion of its supply chain in China.

https://www.tomshardware.com/news/foxconn-reportedly-paying-huawei-workers-more-than-iphone-builders

From the article:

"Xu told the SCMP that FIH employees are often paid higher but that the group that makes iPhones "typically offers better welfare programmes for workers than others," suggesting better benefits."

Nice try.

'often', 'suggesting'... Is vague at best but I have no issue with including all the article references. 

A 'nice try' would have seen me quote only the wages part. 

I simply countered the original claim with factual information: the higher wages. 

That's balance in the discussion. 

It's worth noting that benefits vs wages is often a trade-off situation but it's more likely that higher wages will stimulate the local area economies more than 'benefits'. 

Yes, we've all seen what higher wages does to local economies. It's called inflation.

That’s debatable but I'd say in certain situations it increases the cost of living. Just look at Cork for example and the impact Apple and Google have had. 

Inflation though because of higher wages isn't as clear cut. Some say wages follow inflation and I think the Fed issued a report on this last year attributing 0.1% of a 3% rise in inflation to wages.

Ironically I am sitting on a train traveling home from Barcelona and not paying a cent. The train service is free this year (as it was last year) as an anti-inflationary measure and if anything, wages have been going down.

That's 1,000+ euros saved for me. 

...wages have been going down...which I kind of doubt; see  below


https://www.euronews.com/business/2024/03/29/spains-economy-thrives-why-its-growing-more-than-its-eu-rivals

Remarkably, Spain's growth trajectory far surpassed the eurozone and EU averages, both stagnating at 0%. Moreover, Spain witnessed one of the strongest increases in new employment in Europe during the fourth quarter of 2023, trailing only behind Romania (+1.5%) and Malta (+1.4%).

Retail sales in the Iberian nation soared by 1.9% year-on-year in February 2024, marking the 15th consecutive annual increase. However, while Spanish inflation has notably retreated from the double-digit rates seen in 2022, it still hovers significantly above pre-pandemic levels.

Despite a reduction from the double-digit inflation rates seen in 2022, Spain's inflation remains above pre-pandemic levels.

In March 2024, Spain's consumer price inflation rate rose to 3.2% year-on-year, aligning with market projections and edging up from February's six-month low of 2.8%. Yet, the core inflation rate, excluding volatile components such as food and energy, tapered to 3.3%, the lowest level since February 2022.

You might want to link a source that indicates a general wage decrease.

whtetrash

I would take this news with a huge pinch of salt since China Observer is known to be a propaganda channel.
I didn't find any other news mentionning it and Foxconn in Nanning isn't mentionned in the official supply list by Apple.


However I wouldn't be surprise that Apple is diversifying their factories considering how they are losing the Chinese markets to local brands like Huawei.

avon b7

tmay said:

avon b7 said:

sbdude said:

avon b7 said:

sflocal said:

avon b7 said:

tmay said:

BYD replaces Foxconn, and Huawei replaces Apple, which is wonderful for indigenous phone sales, but not so much for exports. It's hard to imagine that BYD and Huawei will be better for the workers and local economies than Foxconn and Apple, but that's what the PRC will end up with.

I appreciate that Apple is interested in adding more countries, like Indonesia, to its supply chain, while vacating a portion of its supply chain in China.

https://www.tomshardware.com/news/foxconn-reportedly-paying-huawei-workers-more-than-iphone-builders

From the article:

"Xu told the SCMP that FIH employees are often paid higher but that the group that makes iPhones "typically offers better welfare programmes for workers than others," suggesting better benefits."

Nice try.

'often', 'suggesting'... Is vague at best but I have no issue with including all the article references. 

A 'nice try' would have seen me quote only the wages part. 

I simply countered the original claim with factual information: the higher wages. 

That's balance in the discussion. 

It's worth noting that benefits vs wages is often a trade-off situation but it's more likely that higher wages will stimulate the local area economies more than 'benefits'. 

Yes, we've all seen what higher wages does to local economies. It's called inflation.

That’s debatable but I'd say in certain situations it increases the cost of living. Just look at Cork for example and the impact Apple and Google have had. 

Inflation though because of higher wages isn't as clear cut. Some say wages follow inflation and I think the Fed issued a report on this last year attributing 0.1% of a 3% rise in inflation to wages.

Ironically I am sitting on a train traveling home from Barcelona and not paying a cent. The train service is free this year (as it was last year) as an anti-inflationary measure and if anything, wages have been going down.

That's 1,000+ euros saved for me. 

...wages have been going down...which I kind of doubt; see  below


https://www.euronews.com/business/2024/03/29/spains-economy-thrives-why-its-growing-more-than-its-eu-rivals

Remarkably, Spain's growth trajectory far surpassed the eurozone and EU averages, both stagnating at 0%. Moreover, Spain witnessed one of the strongest increases in new employment in Europe during the fourth quarter of 2023, trailing only behind Romania (+1.5%) and Malta (+1.4%).

Retail sales in the Iberian nation soared by 1.9% year-on-year in February 2024, marking the 15th consecutive annual increase. However, while Spanish inflation has notably retreated from the double-digit rates seen in 2022, it still hovers significantly above pre-pandemic levels.

Despite a reduction from the double-digit inflation rates seen in 2022, Spain's inflation remains above pre-pandemic levels.

In March 2024, Spain's consumer price inflation rate rose to 3.2% year-on-year, aligning with market projections and edging up from February's six-month low of 2.8%. Yet, the core inflation rate, excluding volatile components such as food and energy, tapered to 3.3%, the lowest level since February 2022.

You might want to link a source that indicates a general wage decrease.

First Google result. I didn't even read through it because I live here and the salaries problem is hardly ever out of the news. Of course I see people everywhere suffering from the same problem. 

Anyway, at first glance and comparing data from 2012 and 2022, a 3.2% drop. Staggering really. 

In Spanish:

https://www.elconfidencial.com/economia/2023-08-25/espana-salarios-bajos-decada_3723469/#:~:text=Hay solo seis países en,los últimos datos de Eurostat.

dewme

It sucks to be on the wrong side of outsourcing.

mandara

Oh no, how will China ever recover after this.