Foxconn Secures New Production Site in Vietnam Amid Shift Away from China

The new site in Bac Giang province, east of Hanoi, spans 45 hectares and was leased for $62.5 million through Foxconn's subsidiary Fulian Precision Technology Component Co. 

The lease will run until February 2057. This latest move by Foxconn follows disruptions at its iPhone plant in Zhengzhou, China, due to an exodus of tens of thousands of employees and violent worker protests during a Covid-19 outbreak last year.

In addition to the new Vietnam production site, Foxconn has also finalized plans to move some MacBook production to Vietnam, with the first products expected to ship as early as May this year. 

This comes after Foxconn signed a $300 million agreement with a Vietnamese developer in August 2022 to build a new factory in Bac Giang, where it already produces iPads and AirPods. 

Reports also suggest that Foxconn is planning to quadruple its workforce at its iPhone-making Indian plant over the next two years, with a $500 million investment in its Indian subsidiary announced in December 2022.

The move away from China by Foxconn and other major manufacturers is driven by concerns over supply chain disruptions and geopolitical tensions. 

During an earnings call earlier this month, Apple CEO Tim Cook cited disruptions caused by pandemic controls as a key factor in the company's first quarterly revenue decline since 2019. 

Cook confirmed that Apple would continue to diversify its iPhone supply chain and optimize its production processes over time. 

With Foxconn securing a new production site in Vietnam, the company looks set to continue to play a significant role in Apple's supply chain as the tech giant seeks to navigate the ongoing challenges of the global supply chain.

Source: South China Morning Post