As a world-renowned foundry, Foxconn has always been one of Apple's most important partners. Recently, Apple has stepped up its investment in the Indian market, and Foxconn has quickly followed its lead and accelerated its plans to expand production in India. Apple plans to significantly increase production capacity in India, targeting annual production of 50 million units, and Made in India will account for 20% of the world's iPhone production capacity. In order to meet Apple's demand, Foxconn also announced an additional investment of 23 billion yuan in India and accelerated the transfer of production capacity to the Indian market.
1. Foxconn increased investment in the Indian market
The reason behind Foxconn's accelerated "withdrawal" from the Indian market is the huge consumption potential of the Indian market and Apple's emphasis on this market. As the second most populous country in the world, India has a huge potential consumer market. At the same time, Apple has reached a cooperation intention with India** and has been supported by various preferential policies. Apple is not only significantly increasing production capacity in India, but also plans to start research and development of new products in India. Foxconn, as Apple's main foundry, naturally follows suit and increases investment in the Indian market.
2. Foxconn accelerates the diversification strategy of the industrial chain
Foxconn's accelerated "withdrawal" does not mean a complete withdrawal from the mainland market, but a strategic layout of industrial chain diversification. Foxconn has been affected by a number of headwinds in the mainland market, such as inspections of land and tax issues. This made Foxconn realize that it had certain risks in the mainland market, so it needed to find other markets to expand. India's policy advantages and potential market opportunities are just in line with Foxconn's development needs, so accelerating the "withdrawal" from the mainland market and transferring production capacity to the Indian market has become Foxconn's strategic choice.
Foxconn's accelerated "withdrawal" from the Indian market will have a profound impact on Foxconn and related stakeholders. First of all, Foxconn's "withdrawal" from the mainland market may lead to the loss of employment opportunities for some employees. Foxconn has implemented a five-day, eight-hour workday system on the mainland and eliminated overtime, which is a huge challenge for labor-intensive enterprises. Not only will employees lose more of their labor compensation, but the fulfillment of Foxconn's orders will also be affected. Especially when the iPhone is in the peak sales season, Foxconn does not let employees work overtime, which has sparked speculation about whether it is really going to withdraw from the mainland market.
1. Whether Foxconn's job demand can be guaranteed
In the long run, Foxconn's accelerated "withdrawal" will have an impact on the demand for jobs in the mainland market. Although Apple's orders are limited, the flow of some orders to the Indian market will lead to fewer orders in the mainland market, so some employees may be at risk of losing their jobs. However, in the domestic mobile phone market, there is not only Apple, a giant, but also other mobile phone brands and foundries. As a result, the vacant market share is likely to be filled by other businesses, creating more job demand. As one of the world's largest foundries, Foxconn will actively look for new market opportunities and partners under the guidance of the industrial chain diversification strategy to provide more employment opportunities for employees.
2. Foxconn's industrial chain diversification strategy
Foxconn's accelerated "withdrawal" also means that its industrial chain diversification strategy is accelerating. In the past, Foxconn has relied on Apple, a major customer, to stabilize revenues. However, as competition in the global market intensifies, Foxconn realizes that over-reliance on a single customer is risky. Therefore, Foxconn has chosen to accelerate the expansion of new business areas and markets to reduce its dependence on Apple orders. The expansion of investment in the Indian market is only one aspect of Foxconn's strategy to diversify its industrial chain, and it is likely to continue to look for other new markets and cooperation opportunities in the future to achieve sustainable development.
There are a number of factors behind Foxconn's decision to accelerate its "exit" from the Indian market. On the one hand, it is the huge consumption potential of the Indian market and Apple's attention to the market, and on the other hand, the unfavorable factors of the mainland market environment and the planning of Foxconn's own industrial chain diversification strategy. Although the accelerated "withdrawal" may have some impact on Foxconn's employees and the demand for jobs in the mainland market, it is also an inevitable choice for Foxconn to diversify its risks and seek long-term development. For the domestic mobile phone market, Foxconn's "withdrawal" does not mean a decrease in market share, on the contrary, it will provide more development opportunities for other mobile phone brands and foundries. Therefore, although Foxconn's accelerated "withdrawal" has had a certain impact on individual employees and the local economy, in the long run, it will also contribute to the upgrading and optimization of the entire industrial chain and inject new impetus into the sustainable development of China's manufacturing industry.