Bengaluru: Apple Inc’s main assemblers are ditching their longstanding production base of China and shifting more output to India as trade tensions threaten to escalate costs in China.
Hon Hai Precision Industry Company, popularly known as Foxconn has said that it is investing over $200 million in India and Vietnam. Their smaller rival, Pegatron Corporation said that it has moved the manufacturing of some of its networking gear to Indonesia as the company was hit by rising US tariffs on Chinese imports. Pegatron is also exploring bases in Vietnam and India.
While neither company have explicitly said they’re shifting production of Apple products, the twin announcements underscore the extent as to which the Taiwanese companies that make the majority of world’s electronics are reconsidering their operations in China.
From iPhone assemblers like Foxconn and Pegatron to laptop maker Compal Electronics Inc., they’re bracing for a fundamental shift in an arrangement that’s served them well since the 1980s.
“We have begun shipping from Batam island, Indonesia, in January,” Pegatron Chief Executive Officer Liao Syh-jang told reporters on Sunday. “Whether the US will decide to go ahead with new tariffs on 1 March will be a key impact on the speed of the company’s further diversification.”
On Saturday, Hon Hai said via a series of filings that it had injected some $ 213.5 million into an Indian unit, and paid for rights to use 250,000 square meters of land in an industrial park in Vietnam’s northeastern Bac Giang Province for operations and sales.