Foxconn plans to pour additional $300 million into a new factory in Vietnam
Foxconn plans to pour additional $300 million into a new factory in Vietnam
Taiwan-based Hon Hai Precision Industry, better known as Foxconn, plans to lease 50.5 hectares of land in Quang Chau Industrial Park in the northern province of Bac Giang to develop a new project with an investment of $300 million.
Saigon-Bac Giang Industrial Park Corporation, a subsidiary of Kinh Bac Urban Development Corporation, has signed an MoU with Foxconn to lease 50.5 hectares of land in Quang Chau Industrial Park in Bac Giang province.
Foxconn wants to develop a new project with a total investment of more than $300 million, which will create 30,000 jobs for the local workers. In April 2021, Foxconn announced to invest an additional $700 million to expand its production scale with a view to generating export revenue of $10 billion dollars per year.
Foxconn is currently the most significant foreign company in Quang Chau Industrial Park with a total leased area of almost 70ha. The group has a total registered investment capital of $773 million. Foxconn earned a revenue of $3 billion and $6 billion respectively in 2019 and 2020.
According to Nikkei Asia, Apple suppliers Foxconn and Luxshare Precision Industry have started test production of the Apple Watch in northern Vietnam to produce the device outside of China for the first time. It is said that Apple is considering making its MacBook and Apple Watch in Vietnam to ease the company's dependence on China amid rising international tensions.
Vietnam plays an increasingly important role for Apple as the country already produces iPads and AirPods. Making Apple Watch devices is more difficult and requires more advanced technological knowledge. If Vietnam can supply the required talents, it would be a big win for both.
Nikkei Asia quoted a source as saying, "AirPods, Apple Watch, HomePod and more... Apple has big plans in Vietnam, apart from iPhone manufacturing. The components for MacBooks have become more modularised than in the past, which makes it easier to produce laptops outside of China. But how to make it cost-competitive is another challenge.”
According to experts, many factories for high-tech products are moving from China to Vietnam, driven by a surge in Chinese wages over the last 10 years and by the US-China trade war. COVID-19 has also accelerated the phenomenon because it shows many firms that they are overdependent on China as a production base.
Indeed, Apple has shifted equipment production lines from China to neighbouring countries, especially Vietnam since the COVID-19 outbreak. Apple has increasingly used more suppliers from Vietnam.
The 2021 Apple annual supplier list revealed that the tech company had 21 suppliers in Vietnam in 2020, higher than the 14 in 2018. As of May, Apple has 31 suppliers in the country with 160,000 workers.
