Author Topic: Foxconn considers moving Apple Iphone production to Vietnam  (Read 118 times)

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Offline Qu Đơn

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Foxconn considers moving Apple Iphone production to Vietnam
« on: December 04, 2018, 02:20:56 PM »

Head of the Vietnam Chamber of Commerce and Industry Vu Tien Loc is said to have raised the possibility with Prime Minister Nguyen Xuan Phuc of opening a Foxconn factory in Vietnam specifically for iPhone production, according to Reuters citing a Vietnam Investment Review report from Monday.

Loc confirmed talks were underway, advising "We are discussing the possibility of this with Foxconn." The company itself advised it does not comment on matters "related to current or potential customers, or any of their products."

In a note to investors seen by AppleInsider, Morgan Stanley's Katy Huberty suggested that a finishing plant, one with a single-step in the assembly or one intended for final packaging, would not skirt tariffs.

"It is our interpretation that Apple would have to do more than just one stage of final assembly outside China for the origin of the good to shift away from China," wrote Huberty. "[This] would then likely require billions of dollars of investment from Apple and partners over a multi-year period, making this a more disruptive scenario."

A number of Foxconn executives spoke to Reuters in the last week about where production could be moved through, if the company needed to mitigate the effects of the U.S.-China trade war. Vietnam and Thailand were seen as the preferred locations to set up operations, though a lack of skilled labor and inadequate infrastructure would be an issue in either case if such a move was made.

The fresh examination of new bases of operation for Foxconn follow after an interview with President Donald Trump in late November, where he signaled an intention to move ahead with tariffs on $200 billion of goods imported from China, if discussions with Chinese President Xi Jinping failed to bear fruit.

The administration has frozen another round of tariffs, pending further discussion and negotiation, that would apply to all remaining goods not already on the import list, bringing iPhones under the same levy. A levy of 10 percent could be applied to iPhones if it does proceed, which analysts suggest could raise the cost of an iPhone by between $60 and $160, if it is passed on to consumers instead of being taken out of Apple's profits on the sale.

Shifting production to another country has the potential to avoid the tariff, but rules require the product to be substantially transformed for it to be counted as produced elsewhere, so shipping almost-completed goods from China to Vietnam for final finishing touches isn't enough of a change. Add that China is one of the few countries capable of offering a large and low-cost labor force in a single location, and moving production to a new country becomes a potentially expensive and futile endeavor.

Offline Lavender

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Re: Foxconn considers moving Apple Iphone production to Vietnam
« Reply #1 on: December 04, 2018, 02:38:20 PM »
isn't foxconn owned by a Chinese guy?

Offline Qu Đơn

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Re: Foxconn considers moving Apple Iphone production to Vietnam
« Reply #2 on: December 04, 2018, 02:41:09 PM »
yeah, but Chinese slave labor is too expensive compared to Vietnamese slave labor.  Vietnam now has all the conditions and politics in place for explosive growth but we will have to see if the commies are smart enough to keep this going.

Offline Lavender

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Re: Foxconn considers moving Apple Iphone production to Vietnam
« Reply #3 on: December 04, 2018, 02:52:43 PM »
well, then the money will go back in chinas pocket. trade war doesn't work. why not india. I would prefer bkav or somebody with the know-how win the contract.

Offline Qu Đơn

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Re: Foxconn considers moving Apple Iphone production to Vietnam
« Reply #4 on: December 05, 2018, 08:59:58 AM »
yes, the Chinese will make more money in the short term but they also contribute to the infrastructures in Vietnam.  For example, footwear supply chains now have all moved out of China into Vietnam.  The Chinese footwear factory workers thought they have at least 10 years to restructure but nope, all the jobs are gone.  This is the case mainly because the buyers are STILL PREDOMINANTLY American not this mythic Chinese middle class.  Once demand are gone, even 5% profit margin is not enough to keep factories running in China.

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