Apple supplier Foxconn assures normal operations at Shenzhen campus amid growing speculation over shift in production from China to India

A Foxconn representative on Thursday said online posts that suggested the firm was dismantling assembly lines in its Shenzhen campus were ‘false’
The response underlines its position that China will remain a major part of the company’s electronics manufacturing network

Foxconn

Iris Dengin Shenzhen

Published: 8:00pm, 9 Mar 2023

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Foxconn Technology Group has denied growing speculation that it is dismantling assembly lines at its production complex in the southern tech hub of Shenzhen, following concerns raised on Chinese social media that the country stands to lose its primary role in Apple’s manufacturing supply chain.

Reports earlier this month that Apple supplier Foxconn, the world’s largest electronics contract manufacturer, plans to invest about US$700 million on a new plant in India to boost local production fanned heightened concerns across Chinese social media of an accelerated shift of production away from China, as tensions between Beijing and Washington escalate. The Taiwanese company, however, has not formally announced that investment.

A representative of Foxconn on Thursday said that recent online posts – including short video clips that suggest the company was firing temporary workers and tearing down production lines in Shenzhen – were “false”, adding that the firm maintains normal operations in the city.

The response from Foxconn, formally known as Hon Hai Precision Industry, underlines its position that China will remain a major part of the company’s electronics manufacturing network.

Foxconn Technology Group chairman and chief executive Liu Young-way in February thanked officials of Henan province for helping the firm continue production at the world’s largest iPhone factory in Zhengzhou, the provincial capital, during a Covid-19 outbreak last year. Photo: EPA-EFE

In February, senior officials of central Henan province went on a charm offensive in a meeting with Foxconn chairman and chief executive Liu Young-way. They assured the company that the government will provide comprehensive “services” to its operations in the provincial capital of Zhengzhou, home of the world’s largest iPhone factory.

Following that meeting, the firm last month revealed plans to build a smart warehouse on a leased plot inside the Zhengzhou Comprehensive Bonded Zone.

Still, there are visible signs of a readjustment in the local manpower requirements of Foxconn, Apple’s main contract manufacturing partner.

A recent visit by the Post to Foxconn’s recruitment and training centre in Shenzhen’s Longhua district found on site only a dozen jobseekers, all seated in the shade, with some being interviewed online via their smartphones and others waiting for the results.

Jobseekers line up outside Foxconn’ Technology Group’s recruitment and training centre in the Longhua district of Shenzhen, in southern Guangdong province, on July, 25, 2022. Photo: Iris Deng

That was in stark contrast to the thousands of jobseekers lined up at the centre last July, ahead of Foxconn’s peak production schedule for new iPhone models, as fat bonuses of up to 7,480 yuan (US$1,074) were offered to recruits.

At the time, it was estimated that around 2,000 candidates went through the recruitment process on site each day, including hundreds who arrived in shuttle buses and cars provided by several local recruitment agencies.

This time, the signage at the centre showed that new recruits will receive a base salary of at least 2,460 yuan a month and a small one-off bonus of 160 yuan.

While production at Foxconn’s Zhengzhou facility resumed to about 90 per cent of maximum capacity as of December 30, the pace of recruitment also appeared to be slower than before.

Apple to make India its own region, using what it ‘learned in China’

Apple, meanwhile, has reshuffled management of its international businesses to put a bigger focus on India, according to a Bloomberg report that cited people with knowledge of the matter.

That shift will mark the first time that India becomes its own sales region at Apple, which has seen demand for its products surge in the South Asian country.

India is already expected to assemble up to 50 per cent of Apple’s iPhones by 2027, up from fewer than 5 per cent in 2022, to be on par with the scale of production in mainland China, according to a research unit of tech-focused Taiwanese daily newspaper DigiTimes.

Rajeev Chandrasekhar, India’s Union Minister of State for Electronics and Information Technology, said over the weekend that mobile phones will be one of the country’s top 10 products for export by next year, up from zero in 2014.