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

Apple Has a Backup Plan If the U.S.-China Trade War Triggers iPhone TariffsMore

Apple Has a Backup Plan If the U.S.-China Trade War Triggers iPhone TariffsMore

The firm moved much of its production to China in previous years and has embraced the company as another of its largest sources of revenue due to its nature as a status symbol. However Hon Hai board nominee and semiconductor division chief Young Liu believes it won't be a problem.

Major iPhone manufacturer, Foxconn, has come out to say that it has enough capacity to move iPhone production completely out of China and still meet US domestic market demands, if necessary.

Last week, Apple CEO Tim Cook expressed confidence that the company's products will escape fallout from the trade war.

The comments come as U.S. President Donald Trump has threatened to slap further tariffs on $300 billion worth of goods from China - where the bulk of Apple's devices are assembled.

"We have enough capacity to meet Apple's demand", Liu added.

Still, the vulnerability of tech assemblers and chip manufacturers to the trade war has already been established.

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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.

The U.S. market accounts for one in every four iPhones sold worldwide, "so it represents a huge portion of Foxconn's manufacturing business inside China", Strategy Analytics analyst Neil Mawston said.

In other words, new tariffs simply means Foxconn would shift all iPhone production out of China and it believes the capacity is already there.

As it stands, China remains a very important part of Apple's supply chain. Foxconn is now running quality tests for the iPhone Xr series there and plans to begin mass production at a facility in the suburbs of Chennai.

Liu was speaking at Foxconn's first investor conference in Taipei, where the company also said it was well positioned to tackle the "increasingly tough" trade war situation with its production lines across 16 countries. On Tuesday, executives reaffirmed that employment goal, saying construction remained on schedule and that it will hire as many as 2,000 Americans by the end of 2020.

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