July 7, 2020, 2:02

Apple Could Relocate Production of US-Bound iPhones Outside of China If Needed

Apple Could Relocate Production of US-Bound iPhones Outside of China If Needed

Apple’s manufacturing partner Hon Hai Precision Industry Co. recently indicated that it’s prepared to move its production of US-bound iPhones outside of China if the trade war between Washington and Beijing further intensifies.

Hon Hai, otherwise known as Foxconn, is a Taiwan-headquartered company known for the production of various Apple products such as the iPhone, iPad and iPod. Other notable electronic devices on its production lines include the PlayStation, Xbox and Nintendo 3DS video game systems.

Young Liu, a Hon Hai board nominee and the company’s semiconductor division chief, told individuals present at an investor briefing in Taipei on Tuesday that in the event that the trade dispute worsens, the company is prepared to make changes to its production of Apple electronics.

“Twenty-five percent of our production capacity is outside of China, and we can help Apple respond to its needs in the US market,” Liu said, before stating that investments are being made in India for Apple. “We have enough capacity to meet Apple’s demand.”

The official further noted that the US-China trade war “will have some impact” on the company’s production, but that “it will be limited.” He also indicated that Apple has not yet instructed the manufacturer to begin moving its lines elsewhere.

Liu’s remarks come as US President Donald Trump threatened on Monday to slap additional tariffs on some $300 billion worth of goods from China. The trade dispute between the two countries  began in June 2018, when the Trump administration announced that it would be imposing a 25% tariff on roughly $50 billion worth of Chinese goods. Since then, the US and China have been engaged in a tit-for-tat game of tariffs.

Hon Hai has roughly a dozen factories in China, with the largest located in the city of Shenzhen. It was in 2015 that Hon Hai announced that it would be pushing ahead with its intention to set up shop in India, the Financial Times reported. Mass production of iPhones in India is expected to begin later this year, Hon Hai Chairman Terry Gou revealed in April 2019.

“In the future we will play a very important role in India’s smartphone industry,” Bloomberg reported Gou saying at an event in Taiwan earlier this year.

Hon Hai already has two assembly lines in the Indian states of Tamil Nadu and Andhra Pradesh. According to Bloomberg, the manufacturer is presently “running quality tests for the iPhone Xr series” at its sites in India.

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