Key supplier Apple and a dozen other tech giants are planning to split their supply chain between the Chinese market and the US, saying China’s time as a “factory of the world” is over due to a trade war.
Hon Hai Precision Industry Chairman Yang Liu said he is gradually expanding production capacity outside of China, the main manufacturing base for gadgets from iPhones to Dell desktops and Nintendo switches.
The share outside the country is now 30 percent, up from 25 percent in June last year. That ratio is set to rise as the company, also known as Foxconn, moves more production to Southeast Asia and other regions to avoid higher tariffs on Chinese-made products destined for the U.S. markets, Liu told reporters after his company reported financial results.
“Whether India, Southeast Asia or America, each will have a manufacturing ecosystem,” Liu said, adding that while China will continue to play a key role in Foxconn’s manufacturing empire, “country days how the factories of the world are finished. ”
Rising trade tensions between Washington and Beijing have forced device makers to diversify their manufacturing bases outside of China, and Liu said last year that Apple’s most valuable product, the iPhone, could be produced outside of China if needed.
The two countries continue to negotiate trade, but Liu’s comments confirm growing expectations that the China-centric electronics supply chain will fragment over the long term.
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