The deal will see Foxconn, the world’s largest contract electronics maker and assembler of around 70% of all iPhones, become an AirPod supplier for the first time and underlines efforts by the key Apple supplier to further diversify production away from China. — Bloomberg Foxconn Technology Group, the worlds largest electronics contractor by revenue, has halted a plan to manufacture tablet computers in Hengyang in Central Chinas Hunan province according to a statement from Foxconns parent company, the Taipei-based Hon Hai Precision Industry Co Ltd, to the Taiwan Stock Exchange on Tuesday. A report in the Xiaoxiang Morning Herald on May 1 said Foxconn was to be planning to make its Hengyang tablet computer plant operational by the end of May and the Hengyang plant was expected to produce 10 million tablet computers this year, and to have an annual output value of 20 billion yuan ($3.1 billion). A media officer from Hengyangs Baisha Industrial Park acknowledged the statement from Foxconn and confirmed there are ongoing coordination issues related to the matter.
TAIPEI: Taiwanese contract manufacturer Foxconn has won an order to make AirPods for Apple Inc and plans to build a factory in India to produce the wireless earphones, two people with direct knowledge of the matter have told Reuters.
The deal will see Foxconn, the world’s largest contract electronics maker and assembler of around 70% of all iPhones, become an AirPod supplier for the first time and underlines efforts by the key Apple supplier to further diversify production away from China. AirPods are currently made by a range of Chinese suppliers.
One source said Foxconn will invest more than US$200mil (RM900mil) in the new India AirPod plant in the southern Indian state of Telangana. It wasn’t immediately clear how much the AirPod order would be worth.
The person, who requested anonymity as the matter was not public yet, said Foxconn officials had debated internally for months about whether to assemble AirPods due to relatively lower profit margins on making the device, but ultimately opted to go ahead with the deal to “reinforce engagement” with Apple.
“That way, we are more likely to get orders for their new products,” the person said.
The decision to set up production in India was requested by Apple, according to the source. Foxconn vies with Taiwanese rivals such as Wistron Corp and Pegatron Corp to win more orders from Apple, the world’s most valuable company.
A subsidiary, Foxconn Interconnect Technology Ltd, plans to start construction of a manufacturing facility in Telangana in the second half of this year and begin production by the end of 2024 at the earliest, the person said.A second person with direct knowledge of the matter, who also declined to be identified as the matter was not yet public, said the Foxconn subsidiary will make AirPods in India without providing further details.
Analysts have previously said Apple has asked suppliers including Foxconn to make AirPods in India, but details such as the size of investment, timeline and which suppliers have manufacturing plans in the country have not been disclosed.
Foxconn declined to comment. Apple did not immediately respond to a request for comment.
Apple and its key suppliers have been shifting production away from China, where strict Covid-19 curbs disrupted Foxconn’s biggest iPhone factory last year. They are also seeking to avoid a potential hit to business from mounting Sino-US trade friction.
Foxconn said on Wednesday it would ramp up investment outside China to meet customer demand and lower its reliance on China for production.
It was not immediately clear whether Foxconn’s production plan would have an impact on current AirPod suppliers, including Luxshare Precision Industry. — Reuters
