Foxconn, a world-renowned electronics foundry giant, has been trying to build a production center outside Chinese mainland in recent years. With the advancement of Apple's global strategy, Apple has paid more and more attention to the Indian market, and is also preparing to transfer the industrial chain to India. In this case, Apple and Foxconn have also reached an agreement, and Foxconn continues to increase the scale of investment in India, but what people did not expect is that Foxconn seems to be facing various problems, and its plan to build a second production center seems to be difficult to complete.
In just ten years, Foxconn has built more than 40 factories in Chinese mainland, and Chinese mainland has become Foxconn's main production center, and most of Foxconn's production capacity is also placed in factories in Chinese mainland. However, it is obvious that Foxconn does not want to rely on Chinese manufacturing today, not to mention that in Gou's view, Foxconn's success is mainly due to Foxconn's management and Apple's orders, and has little to do with the various discounts and labor support provided by Chinese mainland.
Therefore, Foxconn began to transfer production capacity a long time ago, or build a second production center outside Chinese mainland. Previously, when Trump was the president of the United States, Foxconn wanted to invest in the United States to build factories, and also announced a plan of 10 billion US dollars.
However, Foxconn's plan to build a factory in the United States did not go well, and after many years, Foxconn's investment in building a factory in the United States was less than 10% of the announced at that time, and Foxconn only maintained a team size of thousands of people in the United States, and the factory basically did not start working. Now Foxconn's factory in the United States has been sold to Microsoft and will become Microsoft's artificial intelligence large model data storage center, which also officially announces the failure of Foxconn's investment in the United States.
However, Foxconn feels that the failure in the United States is mainly due to the high cost of building factories and production costs in the United States, and at the same time, the hollowing out of American industry and the lack of sufficient support from the upstream and downstream industrial chain after the transfer of manufacturing, so Foxconn's investment and construction plan in the United States will fail.
In this case, Foxconn has set its sights on emerging markets such as Vietnam and India, which have also accelerated the development of their local manufacturing industry chains in recent years, and many foreign-funded enterprises have also invested in India and Vietnam. For Foxconn, the Indian market and the Vietnamese market are not small.
In this case, Apple, Foxconn's main source of orders, is promoting a globalization strategy to avoid relying too much on China-made production capacity, and announced that it will take supply chain manufacturers to invest in India and Vietnam. Under such circumstances, Foxconn naturally chose to follow in Apple's footsteps and invest in Vietnam and India.
However, judging from the current situation, Foxconn is facing an unprecedented predicament, and its plans to build factories in Vietnam and India are not smooth, and it is facing various problems.
The first is that Foxconn's factories in Vietnam have been subject to power rationing by the Vietnamese government. In recent years, Vietnam's manufacturing industry has developed rapidly, including Adi, Samsung, Micron and many other well-known enterprises have chosen to invest in Vietnam, which has promoted Vietnam's manufacturing and economic development, but also led to Vietnam's infrastructure construction can not keep up.
Nowadays, Vietnam is facing not only problems such as road transportation, but also water and electricity supply, especially in terms of electricity. Vietnam lacks sufficient power generation technology, and domestic power capacity is difficult to meet demand. This has also led to a massive power shortage in Vietnam today.
In this case, major manufacturing companies have been asked by the Vietnamese side to restrict the use of electricity. As one of the largest factories in Vietnam, Foxconn's factories in Vietnam are very large, and so is the electricity consumption. Judging from the data that has come out so far, the electricity consumption of Foxconn's factories basically accounts for about half of the electricity consumption of factories in Vietnam.
Now Foxconn's Vietnam factory is subject to power restrictions, which also affects the production capacity of Foxconn's Vietnam factory, unable to operate on a large scale, and even many production lines and equipment need to be suspended. In this case, Foxconn is also very helpless to choose to transfer some orders to factories in Chinese mainland for production.
Secondly, Foxconn's construction of factories in India has also encountered various problems. Although India has been trying to promote local manufacturing in recent years, Modi also proposed a Make in India plan when he took office in 2014. However, India actually wants to promote the development of local enterprises.
It is precisely for this reason that, judging from the latest news, the Tata Group, a local Indian company, has decided to join Apple's supply chain and start engaging in electronic foundry business. The Tata Group has acquired Wistron's factories and partnered with Pegatron to build a sufficient electronics manufacturing base.
What's more, judging from the current news, Tata Group is negotiating with Chinese smartphone manufacturer vivo to buy 51% of its Indian branch, which also means that the mobile phone OEM business of vivo India will most likely be handed over to Tata Group.
This will largely boost the Tata Group's capacity and technology.
Judging from the current situation, although Foxconn has been trying to prove that it can withdraw from the Chinese market at any time, but now Foxconn is not really able to withdraw as it said, and is facing an unprecedented dilemma.
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