Foxconn Ready To Move Apple Production Out Of China

Foxconn Technology is prepared to move production for Apple out of China if the country’s trade war with the U.S. escalates. In the company’s first investor meeting and conference call since going public in 1991, senior executives at Foxconn tried to reassure investors’ concerns over the trade tensions between the two countries.

“We are totally capable of dealing with Apple’s needs to move production lines if they have any,” said Young-Way Liu, head of Foxconn’s semiconductor business group, according to The Wall Street Journal.

Liu explained that Foxconn is able to supply Apple and other customers with products for the U.S. market at its factories outside of China. Foxconn has plants in Brazil, Mexico, Japan, Vietnam, Indonesia, the Czech Republic, the U.S. and Australia, among others.

While around 50 percent of Foxconn’s revenue is related to Apple, only about 25 percent of its manufacturing lies outside China. The possibility of moving production out of the country has gained momentum after the U.S. increased import tariffs on $200 billion of Chinese goods to 25 percent last month, and proposed tariffs another $300 billion of China imports, including smartphones.

The new tariffs “killed a lot of people’s hope [that] both China and the U.S. will reach an accord,” said an executive. “Now, everyone realizes this is a long-term change.”

Foxconn is also preparing for its founder, Terry Gou, to step down as chairman and focus on his campaign for Taiwan’s presidency. Executives said the company is creating a committee of nine executives to come up with major corporate strategies, and handle Gou’s responsibilities. The panel will consist of four board members and five executives, including Liu, current board member Fang-Ming Lu, chairman of Asia Pacific Telecom, and Sung-ching Lu, chairman of Foxconn Interconnect Technology.

Gou will remain on the board, and is still Foxconn’s largest shareholder.