Foxconn Expands In China’s Henan After Factory Disruption

Apple’s biggest contract manufacturer, Foxconn, is to expand its presence in the central Chinese city of Zhengzhou following disruption at its main iPhone production plant there late last year.

Taiwan-based Foxconn has leased a 293-acre plot in the Zhengzhou Comprehensive Bonded Zone for about 197 million yuan ($28m, £23m) according to a Monday exchange filing, local media reported.

The company said it plans to build smart warehouses at the new site, which it is renting from Zhengzhou’s natural resources and planning bureau and other local athorities through a local subsidiary.

The deal was announced a few days after Foxconn chairman and chief executive Liu Young-way visited the city and met with the Chinese Communist Party’s secretary for Henan provice, Lou Yangsheng.

Factory chaos

Officials urged Foxconn to “take root” in the province and assured Liu the government would provide comprehensive services for Foxconn’s operations, the Zhengzhou municipal government said in a statement.

Foxconn is the largest importer and exporter in Henan, according to local newspaper Henan Daily.

The firm’s expansion in Henan follows severe disruption late last year to Foxconn’s biggest iPhone production plant, known as “iPhone City”, which normally employs about 300,000 staff.

Tens of thousands left the premises after a Covid-19 outbreak in the region last autumn, and newly hired staff later staged violent protests over working conditions.

Shift to Vietnam, India

The chaos led to shortages of Apple’s high-end iPhones and is believed to have accelerated plans by Apple and Foxconn to diversify away from China, industry experts have said.

Foxconn said earlier this month it had secured a new site in Vietnam, after investing $500m in its Indian subsidiary in December, where it plans to quadruple the workforce over two years, according to a November Reuters report.

India is expected to assemble up to half of Apple’s iPhones by 2027, according to projections by Taiwan-based DigiTimes Research.