Even Foxconn says it's looking to move away from China
Apple supplier Foxconn reports that it is working to reduce its reliance on its parent firm's home country of China, and will diversify future production.
A Foxconn facility
Foxconn, which is Apple's major supplier for the iPhone, is based in Taiwan. In announcing its latest Q4 earnings that showed a drop in profits, the firm says it is working to expand away from China.
According to the Wall Street Journal, Foxconn says that currently 70% of its revenue comes from China. However, Chairman Young Liu, said the proportion of revenue from outside the country will continue to grow.
US technology firms are working to leave China in part to end their over-reliance on a single country, especially one that implements intermittent power cuts. They are also looking to move because of continued US/China trade tensions.
In the case of Foxconn, however, chair Young Liu says diversifying is a pragmatic and predictable necessity.
"It is a basic truth that labor-intensive industries transfer to low GDP countries," he said.
The Wall Street Journal says that during Foxconn's Q4 earnings call, Liu explained further that growing economies with labor-intensive industries will periodically see transfers of work. He reportedly described how manufacturing moved from the US to Japan, then to Taiwan, and most recently on to mainland China.
"These high GDP countries must upgrade their industries in order to support the sustainable development of a high GDP society," he continued.
Separately, Foxconn has already announced a $700 million iPhone production plant will be built in India, and is spending $300 million on leases in Vietnam. However, it is also continuing to expand in China.
Read on AppleInsider
A Foxconn facility
Foxconn, which is Apple's major supplier for the iPhone, is based in Taiwan. In announcing its latest Q4 earnings that showed a drop in profits, the firm says it is working to expand away from China.
According to the Wall Street Journal, Foxconn says that currently 70% of its revenue comes from China. However, Chairman Young Liu, said the proportion of revenue from outside the country will continue to grow.
US technology firms are working to leave China in part to end their over-reliance on a single country, especially one that implements intermittent power cuts. They are also looking to move because of continued US/China trade tensions.
In the case of Foxconn, however, chair Young Liu says diversifying is a pragmatic and predictable necessity.
"It is a basic truth that labor-intensive industries transfer to low GDP countries," he said.
The Wall Street Journal says that during Foxconn's Q4 earnings call, Liu explained further that growing economies with labor-intensive industries will periodically see transfers of work. He reportedly described how manufacturing moved from the US to Japan, then to Taiwan, and most recently on to mainland China.
"These high GDP countries must upgrade their industries in order to support the sustainable development of a high GDP society," he continued.
Separately, Foxconn has already announced a $700 million iPhone production plant will be built in India, and is spending $300 million on leases in Vietnam. However, it is also continuing to expand in China.
Read on AppleInsider
Comments
All you have to do is read the Wikipedia entry:
https://en.wikipedia.org/wiki/Foxconn
Honestly, I don't even know where you got the idea that Hon Hai is CCP-Chinese. I've never seen anybody say that. Maybe lay off the gummies?
The richer or more developed the country the higher the tendency to move manufacturing out.
The UK transformed into a services based industry in the 90's.
If manufacturing moved away for mostly economic reasons, the only easy way to get it back is through state subsidies. And even then there are many reasons it might not pay off. TSMC does not think it's US fabs will be very profitable and may even negatively impact its wider manufacturing interests but that is geopolitics, not economics.
What makes the US and Canada better than China? We are all humans and we all share a planet... a globe ... and the tech industry is now a global effort.
The quotes in the article explain why it's more cost-effective to have large-scale manufacturing and assembly in China and other lower-GDP countries. Trust me, I wish North America was up to the task, but our workforce is way, way, way too expensive (and lazy)!
But we are almost never in equilibrium (at best, we are moving towards equilibrium, but it's a moving target) and goodness knows it's not a perfectly competitive market.
That doesn't mean there isn't some insight to be had from the point, though. People who say it's "impossible" to manufacture iPhones in North America, or that it would be crazy expensive / inflationary to do so, are almost certainly wrong. But wrong only because 'impossible' is too strong a word. It's possible. But there's an opportunity cost. Right now the US has an unemployment rate of less than 4%. To move the assembly of 100s of millions of iPhones (or anything else at very large scale) to the US (or any other country) would mean that some fraction of employed people would need to move from their current jobs into iPhone assembly. And so the question is -- does that really make sense? What jobs would we want to give up in order to have iPhone jobs? Would that be good for workers, consumers, and the economy? I don't know the answer, but that's the question that would need to be answered.
My guess -- it doesn't make sense to move iPhone assembly to the US. But it might make sense to move them to Mexico.
The jobs that probably do make sense to move to the US are in microprocessor manufacturing, and the CHIPS act is trying to do that. It probably also makes sense to start building more nuclear submarines in the US. Let's put it this way -- I'd rather American workers be building apple silicon and nuclear subs than assembling iPhones.
Just like Apple is both a Californian and a US company.
South Korea’s government aims to connect chip facilities in the area from Samsung to other companies to create a “semiconductor mega cluster.” The idea is to link up various parts of the semiconductor supply chain from chip design to manufacturing.
“In selecting the new locations, we’ve taken into consideration the synergy effect that could be seen from existing semiconductor clusters,” Lee Chang-yang, South Korea’s trade, industry and energy minister, said.
The South Korean government said that companies will build five chip manufacturing facilities in the cluster.
Taiwan was never separated from China, it was just a place where the losing party was allowed to settle, having some autonomy but inside the Chinese state.