How the largest iPhone supplier aims to reduce its dependence on China

Taiwanese tech giant Foxconn is diversifying its manufacturing operations globally to reduce its dependence on China. The company, which is also the world’s largest supplier of Apple’s iPhone, expects possible tariffs from the United States on Chinese imports amid rising tariffs. trade tensions. The company has spent millions of dollars over the past two years to expand its operations globally. This includes the recent $33 million purchase of a 10-acre plot north of Houston for expansion, as well as investments in new factories in India and Mexico and new commitments in Thailand, reports the New York Times (NYT).
The moves come as US President-elect Donald Trump pledged to impose tariffs on goods imported from China, among other countries, when he takes office next month. Foxconn, a major consumer electronics producer, has been preparing for such a scenario for several years.

What Foxconn said about its global expansion

Foxconn Chairman Young Liu recently explained that the company’s strategic global expansion aims to mitigate the impact of expected tariffs. At a forum in Taipei, Liu told reporters, “The impact on us is probably less than on our competitors,” after the company reached its Texas deal. The company’s newly acquired land in Texas, located adjacent to one of its existing warehouses, is expected to be the subject of development related to the company’s operations. AI Operations.
Apart from this, Foxconn’s global expansion includes hundreds of millions of dollars invested in land and equipment for new factories. These include facilities in Karnataka and Tamil Nadu in India for iPhone production and Jalisco in Mexico for AI server manufacturing. Additionally, a Foxconn subsidiary received approval from the Thai government for a $300 million investment in its computer chip components business earlier this month.

Difficulties Foxconn may face

Foxconn’s global expansion reflects a broader trend among multinational companies, particularly in Asia, to diversify supply chains and move manufacturing out of China. This restructuring was spurred by the trade war unleashed under the previous administration and is also driven by the prospect of new tariffs.
Although companies hope this diversification will soften the impact of possible future tariffs, replicating the manufacturing ecosystem that has benefited from years of government-backed infrastructure investment in China will be a challenge, says the report. New York Times.
Despite previous investments in smaller factories overseas, none have reached the scale or revenue generation of Foxconn’s Chinese operations. However, last year Foxconn’s chairman promised to change that.3