iPhone Production Base Moving from China? Apple Partners Consider Factory in Mexico

[Image source=Yonhap News]

[Asia Economy Reporter Seulgina Jo] Reports have emerged that Apple's iPhone production base will begin to actively shift away from China. As so-called China risk has become prominent due to the US-China trade war and the novel coronavirus disease (COVID-19), Apple’s partners are reportedly reorganizing their global supply chains.

IT specialized media such as PhoneArena reported on the 24th (local time) that Taiwanese companies Foxconn and Pegatron, which manufacture iPhones on a contract basis, are considering building new factories in Mexico. Foxconn is expected to make a final decision on the new factory construction within this year. The new factory is likely to produce semiconductors for iPhones. An anonymous source confirmed to major foreign media, "The new factory will be used to manufacture iPhones."

Pegatron is reportedly in talks to secure funding for additional factory facilities for semiconductor and other electronic component assembly.

PhoneArena analyzed, "It is no secret that Apple wants to relocate part of its iPhone production outside of China," adding, "In the worsening US-China relations, continuing to produce iPhones in China poses a long-term risk for Apple."

Previously, Foxconn’s investment to expand iPhone production in India was for the same reason. Currently, iPhone XR and others are produced in India, and plans are underway to add iPhone 11 production there. It is also expected that iPhone 12 production will be handled in India in the future. It is said that Apple’s strong will played a significant role in this, in addition to Foxconn.

Foxconn currently operates five factories in Mexico. In particular, Mexico has a trade agreement (USMCA) with the United States and Canada, which is expected to provide tariff benefits, and geographically, it is much closer to the US. The Donald Trump administration in the US is also considering financial support measures for companies relocating factories from Asia to the US and Latin America.

Major foreign media reported, "It remains to be seen whether the movements of Foxconn and Pegatron will lead to a broader shift from China to Mexico." Luxshare Precision (立訊精密, Luxshare), a Chinese Apple partner, is also reportedly considering building a factory in Mexico this year.

This content was produced with the assistance of AI translation services.