Foxconn Technology Group has resumed its focus on China in the assembly of iPhone units. The company still maintains most of its manufacturing in China in the hopes of meeting higher costs and labor challenges.
Foxconn announced that resuming and refocusing its work in China can still meet seasonal demand despite the adverse effects of the pandemic to the country. Demand could resurface in the country as companies have started to place their orders for domestic consumers since the abolition of the lockdown imposed by the government.
The report, however, noted that demand may still decline in Western countries who continue to battle the adverse effects of the pandemic to their economy including the loss of jobs and closed institutions.
According to the senior adviser at Quantum International business consultancy in Taipei John Brebeck, Foxconn's manufacturing base would still, be in China since the consumer-facing business is expected to grow in the country.
Run by billionaire Terry Gou, Foxconn does half of its iPhone assemblies in China and is best known for its production of Apple products including handsets and personal computers by other major brands. Its factory is in the southern Chinese city of Shenzhen.
Production spurred in February when the lockdown was imposed by the Chinese government. According to Taipei-based market research firm TrendForce, China's recovering economy aggressively pursued labor and materials. He explained that this ramped up their capacity utilization rate to 70 percent in over a month. Before the utilization rate increased, iPhone contractors faced supply shortages because of factory closures in China.
The report revealed that since last month, Chinese residents have resumed work that caused the resumption of client orders for Foxconn products. Senior industry analyst Eddie Han of Taipei-based Market Intelligence and Consulting Institute claimed that the tech giants such as Huawei and Xiaomi have outsourced to Taiwanese manufacturers during the peak of the pandemic in China.
Last March 25, 2020, Foxconn considered rebasing in India until April 14, 2020, to comply with the nation-wide stay-at-home order influxes in China. The US state of Wisconsin would also impose the same mandate that could cause a possible setback to Foxconn's scheduled opening of a flat-panel plant there in May. The company's Vietnam factory, on the other hand, was reported to continue operation, but production in Southeast Asian countries may experience supply chain disruptions.
The report also claimed that Foxconn would continue expanding outside of China into other Southeast Asian countries. According to the senior the industry with the Market Intelligence and Consulting Institute analyst Pan Chien-Kuang, the continuance of production in China would prevent the company from incurring heavy tariff rates imposed by the US government since 2018.
