FIH Mobile Ltd (富智康), a Hong Kong-listed subsidiary 62.8 percent owned by Hon Hai Precision Industry Co (鴻海精密), yesterday said it would expand its production capacity in India and Vietnam to assuage the effects of trade friction between the US and China.
In an internal report, the cellphone assembler said it has had operations in Vietnam since it purchased a factory there in 2016 and many of its clients are planning to seek its services in the Southeast Asian country at a time of escalating trade friction between Washington and Beijing.
FIH Mobile has also operated cellphone assembly lines in India for several years and it is to continue reviewing its global resource allocations to meet client demand.
In the first half of this year, the Indian market accounted for about 31 percent of FIH Mobile’s total sales of US$6.39 billion, which were down 2.65 percent from a year earlier.
In addition to the positive export prospects for its India facility, FIH said it is upbeat about domestic demand in the South Asian nation and it would expand its supply of electronic components and services there.
FIH Mobile manufactures products for non-Apple Inc brands, such as Xiaomi Corp (小米), Oppo Mobile Telecommunications Corp (歐珀) and Huawei Technologies Co (華為), and runs a broad production base in China.
Hon Hai is the most important iPhone assembler for Apple and has extensive China operations.
US President Donald Trump this month said that the US is to impose 10 percent tariffs on an additional US$300 billion of Chinese goods and that the new tariffs, scheduled to take effect on Sept. 1, would cover smartphones, including iPhones, made in China.
Last week, Trump said that the US is not ready to reach an agreement with Beijing and that his country would not do business with Chinese telecom giant Huawei.
In the first half of this year, FIH incurred US$84.08 million in net losses, compared with a net loss of US$348 million in the same period last year.
The improving bottom line largely reflected its efforts to adjust its cooperation model with HMD Global Oy, which has reduced pressure on its profit margin, FIH said.
Its top five clients, which include HMD Global and Japan’s Sharp Corp, accounted for 89.6 percent of FIH Mobile’s total revenue in the first six months of the year.
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