Apple's "de-China" policy led to the transfer of production capacity in China by Foxconn and Pegatron
In recent years, with the changes in the technology and economic and trade relations between China and the United States, Apple has adopted a strategy of "de-Chinaization". In order to avoid relying too much on China's ** chain, Apple asked its key foundries Foxconn and Pegatron to transfer more production capacity from China to Southeast Asian countries.
Foxconn is Apple's most important foundry partner, responsible for producing star products such as iPhones for Apple. Under pressure from Apple, Foxconn has had to build new factories in places like India and Vietnam in an attempt to shift more capacity there. However, the overall quality of the workforce in India is uneven, many workers need to be retrained, and the infrastructure in India is not able to support intensive production. As a result, Foxconn's new factory capacity in India has been difficult to ramp up to the expected level, putting a lot of pressure on Foxconn's normal operations.
In addition, Pegatron, another important Apple OEM, has also decided to close its production line in Shanghai and shift production capacity to places such as Vietnam and Mexico. Although Pegatron did not explain the specific reason, industry insiders analyzed that this was mainly affected by Apple's "de-Chinaization" policy. Because compared with China, these emerging countries have lower labor costs and are more likely to obtain various policy incentives, which are more in line with Apple's goal of reducing costs and expanding profit margins.
Therefore, Apple's "de-China" strategy has directly led to the closure of its two major foundries in China and the transfer of production capacity overseas. This has had a negative impact on China's related industries and employment.
Foxconn relies on China's dividends to grow and faces difficulties
Foxconn is a world-renowned electronics OEM that has been able to rely on the Chinese market to rapidly expand and become an important partner for global tech giants such as Apple.
Over the past few decades, China has created huge development dividends through reform and opening up. China not only provides sufficient labor resources, but also provides various policy support such as tax exemptions and financial subsidies to enterprises. This provides a very good external environment for the development of foreign-funded enterprises such as Foxconn.
China has a large labor force, and these workers are generally more educated and have a conscientious and responsible work attitude. Foxconn is able to recruit a sufficient number of high-quality workers at a relatively low labor cost, which greatly reduces production costs. Without the various dividends brought by the Chinese market, it would be difficult for Foxconn to achieve today's huge scale and industry status by relying only on its own strength. It is precisely with the support of the Chinese market that Foxconn can expand rapidly in a short period of time and become the world's top electronic product OEM company.
However, under pressure from Apple, Foxconn had to move more production capacity out of China. This puts Foxconn in a difficult situation, because there are many uncertainties in building factories in new locations such as India, and it is difficult to quickly ramp up production capacity. Foxconn must not only ensure production, but also deal with the reduction of the ** chain. This has brought great challenges to the development of Foxconn.
China's manufacturing industry is facing transformation in response to the retreat of Foxconn and Pegatron
Foxconn and Pegatron's decision to retreat from China, shut down production capacity and move overseas, has affected employment in China to some extent. But in the long run, China is well equipped to deal with such shocks. We have to make it clear that Foxconn and Pegatron are mainly engaged in low-tech OEM business, and they do not have core technology advantages. There are many companies in China that have the ability to design and manufacture hardware products, which can completely replace their position in the OEM field.
China has entered a critical stage of industrial upgrading, vigorously developing high-tech industries such as integrated circuits, artificial intelligence, and new energy vehicles. At the same time, China is also promoting the intelligent, digital and service-oriented transformation of the manufacturing industry. This means that China will gradually phase out the low-value-added foundry industry and turn to high-end manufacturing with independent intellectual property rights and core technologies.
The departure of these OEMs will have limited impact on China, and may instead expose them to development bottlenecks. Because of the huge Chinese market, it is difficult for them to replicate the successful model in other developing countries. Chinese enterprises will gain new impetus for development in industrial upgrading.
In short, the retreat of Foxconn and Pegatron is the inevitable result of the transformation of China's manufacturing industry. China will firmly promote the modernization of the industrial chain and the optimization and upgrading of the industrial structure, and make new breakthroughs in intelligent manufacturing. China's manufacturing industry will take this opportunity to begin to move towards a new stage of development.
100 help plan