Hon Hai Precision Industry Co., a key iPhone assembler known also as Foxconn Technology Group, is making deals to expand its operations in India and Vietnam despite the continuously growing trade dispute between China and the United States.
The company announced that they have invested around the U.S.$213.5 million long-term deals into an Indian unit through a series of filings from September to January. The company also paid U.S.16.5 million to Fuhua Co. Ltd to lease a 250,000 square meters of land in an industrial park in Vietnam to be used for its operations and marketing. According to the filing, the company currently owns 99.9 percent of the Indian units.
Recently, Hong Kong-listed FIT Hon Teng, an iPhone cable and connector maker that Foxconn controls, purchased separate Vietnamese land rights. It is unsure whether purchased the land in the industrial park in Ba Giang Province is related to Fit Hon Teng's move.
FIH Mobile, a Hong Kong-listed subsidiary of Hon Hai, assembles Xiaomi's handsets in India. Hon Hai, however, is not manufacturing iPhones in the country.
The new tariffs implemented on networking equipment and server motherboards cause some Taiwanese hardware makers to relocate their operations outside China. Despite the threats of U.S. President Donald Trump of imposing tariffs on all Chinese imports, Apple did not indicate that they are moving their productions outside China. However, other manufacturers have repeatedly said that they have other branches in other nations where they can further transfer their productions if needed.
Recently, Foxconn announced their move of producing their devices in India to reduce its dependence on China for manufacturing and sales. According to reports, Foxconn senior executives, including Chairman Terry Gou, plans to visit the country to discuss the plans after the Lunar New Year. The company's decision to expand to India is in line with the trend among other companies to avoid the conflict between the two economic giants. Foxconn currently manufactures most of Apple's iPhones in China.
India attracts most of the world's tech companies as the difficulty of the Market in China grows. It's potential as a manufacturing base and its 1.3 billion consumer's market are the factors that attract investors. According to eMarketer, only a quarter of Indians own smartphones. Apple struggled in marketing in its product in the Indian market. The company's market share dropped consecutively from 2 percent to 1 percent in 2017.
