China’s “days as the world’s factory are done,” says Foxconn

The world’s biggest contract electronics manufacturer, Foxconn, has mentioned plans to decrease its presence in China, and that the nation was no longer the world’s factory.

Chairman Young Liu said that the Taiwan-headquartered company’s capacity outside of China had grown from 25 per cent to 30 per cent in a year. The company has looked to diversify its supply chains due to US-China trade tensions.

“No matter if it’s India, Southeast Asia or the Americas, there will be a manufacturing ecosystem in each,” Bloomberg quotes Liu as saying, adding that though China would remain key to its production, the country’s “days as the world’s factory are done.”

China is currently Foxconn’s main base for products such as Apple iPhones, Dell desktops and Nintendo Switches.

There is another shift underway at electronics giant, which saw second-quarter revenues for consumer products down 15 per cent compared to last year. It managed a total 34 per cent net profit increase in the period, driven by its servers and computing business.

The Financial Times reports that Foxconn is retuning its business model away from low-margin, labour-intensive assembly of mass-market products like the iPhone  and towards higher-margin items like industrial automation and driverless vehicles components.

Picture: AFP/Getty Images

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