Foxconn is about to say goodbye to China: Spending $ 700 million to build a new factory in India, expected to employ 100,000 people

Bloomberg cited sources close to Apple’s partner, Foxconn Technology Group, is planning to invest about $ 700 million in a new factory in India. This new location will help increase production in this South Asian country and also partly clarify the trend of rapidly moving manufacturing activities out of China, as tensions between Washington and Beijing escalate.

The Taiwanese manufacturer, part of Hon Hai Precision Industry Co., is expected to build a factory to produce iPhone parts on a more than 120-hectare site near the airport in Bengaluru, the capital of Karnataka state, the region. south india. Sources close to the plant revealed that this factory may also assemble Apple handsets and Foxconn may also use this location to produce some parts for its electric vehicle business.

This is one of Foxconn’s biggest investments in India to date. In addition, this move also shows that China is at risk of losing its position as the world’s largest producer of consumer electronics. Apple and other US brands still mainly work with suppliers based in China, but are also exploring alternative locations such as India and Vietnam.

These are changes driven by businesses rethinking the global supply chain after the pandemic and the Russia-Ukraine conflict. This trend could also reshape the way electronic devices are manufactured globally.

The new manufacturer in India is expected to create around 100,000 jobs. The current iPhone assembly complex in the Chinese city of Zhengzhou employs about 200,000 people, although this number rises even higher during peak production seasons.

Output at the factory in Zhengzhou fell before the holiday season late last year, due to the impact of the Covid-19 epidemic. Accordingly, Apple has had to reconsider a supply chain that is too dependent on China. Foxconn’s decision is the latest move to suggest that suppliers may be leaving China much faster than expected.

However, this plan may still change as Foxconn is in the process of finalizing the details of the investment and project, the source further revealed. Furthermore, it remains unclear whether the plant will generate new capacity or only manufacture products that Foxconn ships from other locations, such as parts in China.

Apple declined to comment on this information. Meanwhile, the Hon Hai side also made a similar move, although Chairman Yong Liu had a meeting with Indian Prime Minister Narendra Modi this week.

Foxconn’s decision will be a blow to Mr. Modi’s government. India’s prime minister will therefore have more opportunities to close the country’s technology gap with China, amid difficulties for Western investors and businesses as Beijing tightens regulations on the region. private sector.

Recently, India also announced financial incentives for Apple suppliers such as Foxconn. The company started manufacturing the latest generation iPhones at a location in Tamil Nadu last year. Small assemblers such as Wistron and Pegatron have also ramped up operations in India, while suppliers like Jabil have begun manufacturing components for AirPods in the country.

Refer to Bloomberg