Apple has a backup plan if the US-China trade war gets out of hand.
The company’s primary manufacturing partner has enough capacity to make all iPhones bound for the US market outside of China if necessary, according to a senior executive at Hon Hai Precision Industry. The Taiwanese partner now makes most of the smartphones in the Chinese mainland.
Hon Hai board nominee and semiconductor division chief Young Liu made the comments at an investor briefing in Taipei on Tuesday. As the US-China trade war is getting more grim and unpredictable, Hon Hai will fully support Apple if it needs to adjust its production, he said.
“Twenty-five percent of our production capacity is outside of China and we can help Apple respond to its needs in the US market,” said Liu, adding that investments are now being made in India for Apple. “We have enough capacity to meet Apple’s demand.”
Apple has not given Hon Hai instructions to move production out of China, but it is capable of moving lines elsewhere according to customers’ need, Liu said. The company will respond swiftly and rely on localised manufacturing in response to the trade war, just as it saw the need to have a base in the US two years ago before the trade dispute began, he said. — Reported by Debby Wu, (c) 2019 Bloomberg LP