The ongoing US-China trade battle has engulfed every industry in it. From US’ famed tech companies to rare earth metals, everything is now on the table. Due to China’s prowess in manufacturing and its importance in the current manufacturing scene, doubts have even started coming up as to whether US consumer hardware companies will survive these times or not. So much so are the doubts, that even a trillion dollar behemoth like Apple, has been put to test.
In the midst of all this though, there is a relief package coming in via Apple’s biggest OEM — Foxconn. Foxconn has said that it had enough capacity to meet Apple’s demands in case it has to adjust its production lines outside of China due to the ongoing trade tension between the US and China.
Foxconn, formally addressed as Hon Hai Precision Industry Co., Ltd., is the world’s largest contract electronics manufacturer with its headquarters in Taiwan and responsible for manufacturing major components of Apple devices. Most of Apple products are manufactured in China which is why the US-China trade war is supposed to affect Apple’s production cost increasing the rates of its devices especially the iPhone.
The Taiwanese firm Foxconn issued the statement in context of the recent statement made by the U.S. President Donald Trump. President Trump has threaten to increase tariff on Chinese goods worth $300 billion. With the ongoing tension between the U.S. and China, Foxconn wants to ensure to keep trust of their clients like Apple.
A member of the firm’s board, Liu Young-way, said that the company’s twenty-five percent production capacity is outside China and it can handle Apple’s market demands. He also said that there will be challenges due to the US-China trade war they would be limited.
Foxconn came into spotlight when it failed to meet its job-creation targets in the U.S. which was promised.
The firm is about to undergo some leadership changes due to which more executives will be involved in its daily operations. This change is set as their chairman Terry Gou seeks to run for the upcoming presidential election in Taiwan. As Gou plans to step down from his responsibility, Foxconn will get an operations committee which will include its nine senior executives. These members will now have a greater control over the firm.
Foxconn, under the leadership of Terry Gou had invested $10 billion in order to create around 13,000 jobs in Wisconsin. It has also invested $8.8 billion in a display factory in Southern China. The firm has mentioned that this plan has been of great importance to them. It has been called ‘Deal of the Year’ by the Mid-American Economic Development Council. Yet some are speculative that the deal will be causing the company a huge loss. With a change in leadership, the investors are keenly observing what is to happen of this investment.
According to Liu, the Wisconsin investment is facing no delays and will be reaching $1.4-1.5 billion by the end of 2020 with up to 2,000 employees. The project will involve manufacturing of displays and servers. Liu said that the project is set to go into production by the end of 2020.
The firm’s investors conferences will now be held twice a year and this step has been taken to increase transparency and trust in the firm.