Foxconn chairman plays down iPhone relocation talk, reassuring workers and officials that Chengdu factory is an ‘important’ base

Foxconn boss Liu Young-way told workers at its Chengdu factory that there were no plans to leave the city, and that it was an ‘important’ production base for the region
The Taiwanese company is the world’s largest contract manufacturer of iPhones and iPads, making it a key player in Apple’s global supply chain

Foxconn

Ben Jiangin Beijing

Published: 6:00pm, 9 May 2023

Why you can trust SCMP

Foxconn Technology Group, the Taiwanese contract manufacturer of iPhones and other products for US tech giant Apple, has reassured workers and officials in Chengdu, capital of southwestern Sichuan province, that it remains committed to local production amid growing concerns in China that the company may relocate factories to countries like India.

Foxconn chairman and chief executive Liu Young-way visited Chengdu last week, telling workers that the company has no plans to leave the city and that its plant – which employs over 100,000 people – remains an “important” production base, according to a report on Monday by Economic Daily News, a Taiwanese newspaper.

“All the products were made by you, and we should be grateful for that,” Liu was quoted as saying. “We have no plans to exit Chengdu. I hope that Chengdu could become an important base in the western [region of China] to support hi-tech industries, and make more money [for its people].”

Apple ‘pleased’ with better-than-expected China sales amid slowdown

Foxconn, also known as Hon Hai Precision Industry, is the world’s largest contract manufacturer of iPhones and iPads, making it a key player in Apple’s global supply chain. While mainland China remains the primary manufacturing base for Foxconn, rising labour costs and disruptions from the country's Covid-19 controls last year prompted the company to begin diversifying production to countries like Vietnam and India.

Foxconn's Liu has already met with Indian Prime Minister Narendra Modi twice in the last 12 months.

At the same time, Foxconn has tried to assure local government officials that it is committed to China. Earlier this year, Liu visited Zhengzhou, where Foxconn operates the world’s largest iPhone plant, to unveil a new business centre in the city, capital of central Henan province.

On his Chengdu trip, Liu met Sichuan Communist Party secretary Wang Xiaohui, who reportedly asked Foxconn to keep investing in the province. On the same trip, Liu also met Chengdu’s Communist Party Secretary Shi Xiaolin and the city’s mayor Wang Fengchao, according to official Chinese media reports.

Workers inside a Foxconn factory in the township of Longhua in Guangdong province in this May 26, 2010 file photo. Photo: Reuters

China’s draconian Covid-19 control measures, which were abruptly lifted early this year, had forced Foxconn to operate under a production “bubble” in both Zhengzhou and Chengdu. Worker unrest in Zhengzhou last November disrupted production of Apple’s iPhone 14 models.

Foxconn is now reportedly losing some Apple manufacturing orders to rival contractors, including Luxshare Precision Industry Co.

Apple has tapped Shenzhen-based Luxshare and Taiwanese contract manufacturer Pegatron Corp to assemble premium iPhone 15 models that are set to be unveiled later this year, according to a recent report by the Economic Daily News.

Pegatron and Luxshare may receive up to 25 and 30 per cent of production orders for the iPhone 15 Pro and Pro Max, respectively, Eddie Han, a senior analyst at Taiwan-based consultancy Isaiah Research, previously told the Post.