Tech

Foxconn is ready to move iPhone production out of China, if needed

Foxconn is ready to move iPhone production out of China, if needed

Although Foxconn's biggest presence is within China, the company also has operations in Brazil, India, Japan, Malaysia, Mexico, South Korea, within Europe, and the US.

It will also start making networking and server products for the US market by the end of next year, on top of LCDs starting next year, Liu said. "US-China relations are changing dramatically and we are closely monitoring them, and so does Apple", (our translation) Liu said at the conference.

Liu, who is a member of the company's newly formed operations committee, said that Foxconn now maintains production bases in 16 countries and can respond swiftly and rely on localized production in response to the trade war, just as it saw the need to set up a base in the United States two years ago before the tariff war kicked off.

As Apple provides close to half of Foxconn's revenue, a decreased demand for iPhones leads to a drop in manufacturing demand for the company.

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Young Liu, a senior Foxconn executive who leads the semiconductor business, recently revealed that Foxconn is prepared to move production of all iPhone models - that are imported to the USA - away from China, if the trade war escalates. How many Android smartphone brands could do the same? Older models are already assembled at a Wistron plant in Bangalore. Foxconn Technology Group Chairman Terry Gou recently said in April that the iPhone will go into mass production in India this year, according to Bloomberg. To meet the demand, Foxconn would need at least one or two substantial factories outside China.

The news should be particularly encouraging given the alternative scenario which would likely see Apple having to bear the brunt of a more costly iPhone. Alternatively, absorbing the cost entirely could hit Apple's earnings per share by six to seven percent. The country is also a key market for the firm.

Ives also said that if Trump does levy duties on roughly another $300 billion worth of Chinese goods, it could add between $100 and $120 to the iPhone's price should production be significantly impacted.