Apple's iPhone assembler Foxconn Technology Group is cutting expenses for 2019 in anticipation of tougher conditions, according to a person familiar with the matter. The cost-cutting is part of the year-end exercise where different departments submit their budget estimates for the next year, the person said, asking not to be named as the information is private. The Taiwan-based contract manufacturer, formally known as Hon Hai Precision Industry, aims to cut 20 billion yuan (US$2.9 billion) from expenses next year, Bloomberg News earlier reported, citing an internal memo. Foxconn chairman sees biggest challenge in US-China trade war “We regularly review our global operations to ensure that we are always applying our resources in a way that supports our operations, our customers' demands and critical research and development priorities while also meeting the needs of all areas of our company,” Foxconn said in a statement in response to queries. “These reviews enable us to meet our long-term responsibilities and commitments to our customers, our employees and business partners, and to our shareholders.” Foxconn's cost-cutting follows a reduction in component orders by Apple after weaker-than-expected demand for its new, lower-priced iPhone XR model. Apple recently informed two component suppliers in China that it was cutting orders for their respective parts by around 30 per cent from what was originally planned, according to people familiar with the matter. The two companies have been long-term suppliers to the Cupertino, California-based technology giant. Terry Gou Tai-ming, the billionaire chairman of Apple's main iPhone supplier, has said that the biggest challenge facing Foxconn is a trade war between the US and China.