iPhone manufacturer Foxconn modifies supply chain due to trade war

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Foxconn is one of the biggest production companies in the world, responsible for manufacturing a lot of electronic products. Foxconn produces gaming consoles, smartphones, tablets and many more products. Foxconn announced they plan to modify its supply chain due to the deteriorating relationship between the United States and China.

The trade war between China and the United States is still going on and only seems to get worse. Companies are trying to stay ahead of the latest measures and the potential fallout. Foxconn is a manufacturer of computer and smartphone components and is a long-term partner of many big tech brands like Apple.

Most of Foxconn’s factories are located in China. Last year, the company started building more factories outside of China. Liu Young-way, Foxconn’s CEO, announced during the presentation of its latest quarterly results that the company will establish two different supply chains: one for the Chinese market and one for the American market.

Less Chinese factories

According to the CEO, the ‘world factory’ as we know it, with centralized factories for large companies, no longer exists. “It doesn’t matter if it’s India, Southeast Asia or America. A factory ecosystem will be set up in each country”, Liu said. The CEO also mentioned that the company has plans to increase its international production capacity, but further details are lacking. Thirty percent of the products manufactured by Foxconn is already made outside of China.

Foxconn and its partners have invested heavily in establishing factories in India in recent years. The iPhone 11, for example, is manufactured in India itself for the Indian market.

Trade war

The decision to split the operations for the two superpowers appears very rational at the moment. The U.S. government banned transactions with the Chinese smartphone brand Huawei earlier this year and last week it was announced that TikTok, in its current state, and WeChat will also be banned in the United States.

In addition, the U.S. government is working on a ‘clean network’ without any Chinese technology or applications.

Tip: Trump bans American transactions with TikTok and WeChat