Tue, Dec 04, 2018 - Page 12 News List

Foxconn planning iPhone plant in Vietnam: report

By Ted Chen  /  Staff reporter

Foxconn Technology Group (富士康科技集團) is planning to open an iPhone manufacturing facility in Vietnam to mitigate the effects of the US-China trade spat, the Vietnam Investment Review reported yesterday.

Foxconn, known as Hon Hai Precision Industry Co (鴻海精密) in Taiwan, has begun talks with the Hanoi People’s Committee, Vietnam Chamber of Commerce and Industry director Vu Tien Loc was quoted as saying in the report.

Last month, US President Donald Trump suggested that 10 percent tariffs could be placed on mobile phones and laptops made in China, further straining companies in Apple Inc’s supply chain amid slowing smartphone sales around the globe.

Samsung Electronics Co makes about one-third of its smartphones in Vietnam and the arrival of Foxconn could displace the South Korean giant’s position as the leading smartphone manufacturer in the country, said Tran Toan Thang, director of the Vietnamese National Center for Socio-Economic Information and Forecast.

Samsung and its local suppliers could also face greater difficulties in hiring workers following Foxconn’s arrival, as there is no longer an excess of workers in Vietnam, Tran said.

The arrival of another major foreign smartphone manufacturing firm in Vietnam could bring more opportunities for Vietnamese suppliers, Tran said.

“As there are more suppliers than it needs, Samsung has had the luxury of cherry-picking its local partners,” Tran was quoted as saying.

Meanwhile, FIT Hon Teng Ltd (鴻騰), Foxconn’s Hong Kong-listed subsidiary, last month also announced that its board of directors has proposed making a capital injection of US$130 million in New Wing Interconnect Technology (Bac Giang) Ltd, a wholly owned unit based in Vietnam. Bloomberg has reported that Foxconn is planning to cut costs by 20 billion Chinese yuan (US$2.9 billion) and to cut its non-technical workforce by 10 percent as wage levels rise in China.

However, Taiwanese contract electronics manufacturer Pegatron Corp (和碩) chairman Tung Tzu-hsien (童子賢) last month said that it would take up to five years for Southeast Asian nations to replace China’s leading position as a supply chain hub.

In terms of market size and infrastructure, China cannot be easily replaced by Southeast Asia, Tung said on the sidelines of a consumer electronics exhibition in Taipei.

He said that there are more considerations than cheap labor, adding that wage levels in Southeast Asia have also been rising amid rapid economic growth in the past few years.

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