Apple can make iPhone outside of China to avoid Trump tariffs

Daniel Fowler
June 12, 2019

Foxconn, one of Apple's largest suppliers, has moved to reassure consumers and investors that prices and supplies of the Apple's iPhone will not be affected by the ongoing US-China tariff war.

The company's board nominees and chief of semiconductor division, Young Liu has further stated that 25% of the production capacity is outside China presently and future investments are also being made in India right now, henceforth, assuring that the company can meet Apple's needs when required.

Hon Hai, known also as Foxconn, is the American giant's most important manufacturing partner. Older models are already assembled at a Wistron plant in Bangalore.

The Cupertino, Calif. -based company's primary manufacturing partner has enough capacity to make all iPhones bound for the USA outside of China if necessary, according to a senior executive at Hon Hai Precision Industry Co.

The trade war "will have some impact, but it will be limited", Liu said.

The move at the world's largest contract manufacturer also comes after Gou told Reuters in April that he planned to step down from Foxconn to pave the way for younger talent to move up the ranks.

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The committee includes most members from Foxconn's proposed new board, including Foxconn CFO Huang Chiu-lien and Foxconn Interconnect Technology Ltd Chairman Lu Sung-Ching.

Foxconn did not provide a reason for their absence on the committee. The trade war has disrupted a complex global supply chain involving many countries beyond just China and the U.S. Many components that go into devices aren't made in the U.S., despite being designed there.

Gou's company wields unusual influence for an Asian company in the U.S. When President Donald Trump called for more investment in local manufacturing, Gou was among the first to heed the call, agreeing to build a 13,000-worker facility in Wisconsin in exchange for more than $4.5 billion in government incentives.

Liu said the Wisconsin investment, which is expected to reach $1.4-1.5 billion with up to 2,000 employees by end of 2020, was on schedule.

Addressing investors' long-time concerns about Foxconn's approach to corporate transparency, the company announced a plan to hold investor conferences twice a year. They closed up 0.4% on Tuesday, in line with the broader index.

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