Terry Gou was shocked! Foxconn is facing sanctions, and the situation is changing rapidly!
Since Huawei was taken by the United States, Foxconn took the initiative to give up Huawei production, and Terry Gou came up with the idea of relocating the production base from the mainland. And Apple is"Royal"Foundries, starting in 2019, all foundries, including Foxconn, will move to Southeast Asia.
The authorities have long heard about Foxconn's illegal activities on the mainland. However, since Foxconn has created a lot of jobs, high GDP and high taxes for our country, they have not taken this matter to heart. However, now that Foxconn has decided to leave, the previous debt will naturally have to be repaid. To this end, the tax department, the land management department and other departments have begun to investigate Foxconn's illegal acts!
However, Gou's actions completely angered him. In less than a year, Foxconn cut 300 billion yuan in production capacity, and at its peak, the company had as many as 1.2 million workers across the continent. In the past, Foxconn hired a large number of workers every year in the first month after the launch of the new iPhone, but now it has only 800,000 workers in factories on the mainland.
Coupled with Foxconn's plans to expand production capacity in India, this is a daunting task. Although India will only account for 12% of iPhone production in 2023, Apple has set a quota of 20%-25% for iPhone production in India for 2024, which means that India's production will double in a year.
India also has a partnership with Foxconn, which analysts say can only produce 50 percent of iPhone cases, leading to high costs. But to everyone's surprise, India** has decided to reduce Foxconn's production costs from the original 15% to 10%. India** has even publicly stated that it wants India to become a global mobile device manufacturing base, which obviously cannot compete with China?
However, Terry Gou was also scared because he didn't expect the blow to come so quickly. Even if it insists on building a factory in India, Apple will not be able to place all orders with Foxconn, which has been acquired by Luxshare and Pegatron in the past two years.
In addition, the local OEM company BYD has also attracted the attention of Gou, BYD not only got the foundry right from Huawei, but also got the foundry right from Jabil, which is also seen as BYD's attempt to enter the Apple industry chain and snatch orders from Foxconn.
What worries Gou even more is that Huawei's strong return marks the end of Apple's boom and bust. According to Apple's Q1 2024 earnings report, sales in Greater China fell by 13%, and that's when Huawei didn't do its best. When the production capacity problem of Huawei's Kirin chips is completely resolved, Huawei's market share will drop by at least 30%. Do the math, how many orders do you think Foxconn will be able to get from Apple in the coming years?