In the midst of a trade war between the U.S. and China, Apple Inc. (NASDAQ: AAPL) is preparing its plan to move manufacturing location of its iPhone.
According to a senior executive at Hon Hai Precision Industry Co Ltd., the Company behind over 200 million smartphone sales across the world, Apple has the potential to manufacture all U.S. bound phones outside of China. Hon Hai, also known as Foxconn, is currently Apple’s top manufacturing partner. It produces approximately 75% of its devices in China.
China has reportedly advised tech companies to not abide by U.S. demands that would dramatically affect Chinese manufacturing plans. These tech companies have been warned of facing unannounced consequences.
Beijing is a top producer of Apple’s iPhone and iPad. It is also the largest international market for these devices. President Donald Trump, however, has threatened new tariffs on around USD 300 Billion worth of Chinese goods, including the iPhone.
At a shareholder meeting in Taipei on Tuesday, board nominee and Semiconductor Division Chief, Young Liu, reassured investors that Foxconn will fully support Apple as the trade war becomes more erratic and dicey.
“Twenty-five percent of our production capacity is outside of China and we can help Apple respond to its needs in the U.S. market,” said Liu. “We have enough capacity to meet Apple’s demand.”
Possible locations for the shift in Apple product manufacturing include India and the United States. It is not certain that India will ever become a major production base for the Company, but tests in the country are being run for the iPhone XR series. Older versions of the iPhone have been manufactured at a Wistron plant in Bangalore. As for the localized production possibility, Foxconn has arranged to build a 13,000-worker facility in Wisconsin for more than USD 4.5 Billion in government incentives. On Tuesday, executives said the facility will employ up to 2,000 laborers by the end of 2020.