Spend $16 billion to evacuate China! Will Foxconn face a rollover?
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It is understood that many companies led by Apple have begun to move their factories out of China.
According to the latest survey, since 2018, Apple's top manufacturers, including Apple mobile phone maker Foxconn, have transferred production capacity to China and increased production capacity in India, Mexico, the United States, Vietnam and other places. Most of these businesses are from India, and Foxconn is considered to be the leader of this shift.
They said that this move will increase costs in the short term, but in the long run, it will be beneficial to Apple's leading merchants. Just as Apple's supply history can't justify this behavior, it makes no sense.
This move is due to special factors, Apple's ** chain is in trouble, with a quarterly loss of 4 billion to 8 billion yuan at its peak. In the long run, it will be difficult for Apple to afford such a huge loss. Therefore, from the perspective of the enterprise itself, the diversification of the ** chain is actually a good choice.
But for Apple merchants, this is not necessarily good news. The analysis report pointed out that India's Tata could become the largest exporter of Apple phones due to Apple's increased investment in India.
As we all know, Foxconn wants to follow Apple into India, and if Foxconn fails to win most of the orders and give Tata a sizable market share, Foxconn's position will rise. After all, they didn't invest much, but it seemed like a good direction for Tata.
But the problem is not just superficial.
The deeper reason is that there are certain restrictions on moving iPhones from China to India.
While Apple plans to expand production capacity in India, it is unlikely to move all of its production capacity to India. First of all, it has an advantage in China's **chain, so it is unlikely to completely abandon China's **chain to diversify. Apple, on the other hand, is not limited to India. Vietnam, for example, has become a major hub for the production of computer products, including Apple laptops and Apple watches.
It is clear that if these investments are canceled, the Indian market will not have much production capacity without shaking the key position of the Chinese ** chain.
Secondly, Apple plans to take such a move due to its concern about uncertainty and the fact that it does not want to lose more. Foxconn is facing the same problem, but unfortunately, Foxconn's market in India is more volatile. For example, last year's iPhone 15 series products had a direct impact on Foxconn's production capacity due to their low yield rate of parts in India.
In addition, there are many problems with investing in India, such as local equipment, transportation of employees, and so on. These problems will always be forgotten, and there is enough energy to solve them in the long run, and sooner or later they will become what Foxconn wants. But what about India's much-criticized investment climate? Inexplicable modifications, confiscation of funds, etc., I'm afraid even Foxconn is not immune.
Even so, the Tata Group is still monitoring Foxconn's production capacity. What makes people wonder is whether Foxconn has really chosen the right place? If Foxconn decides not to relocate, it won't face so many uncertainties, given its interdependence with Apple.
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