Foxconn chief executive says company shifting supply lines out of China as it prepares for worst-case scenario, as it makes EV bet
The head of Taiwanese electronics manufacturing giant Foxconn has said he would halt production “altogether” if a situation arose similar to the chaos last year at the company’s giant iPhone manufacturing plant in Zhengzhou, in northern China.
Speaking to the BBC, Foxconn chairman and chief executive Young Liu said he would make the decision even if it irked companies like Apple, for which it assembles a wide range of products.
“If the same situation occurs again, I would stop production altogether,” Liu said.
He said the scenes that unfolded at the Zhengzhou plant late last year resulted from mainland China’s zero-tolerance Covid-19 policy and a lack of transportation, which led hundreds of workers to flee the plant on foot for fear of infection.
Foxconn maintained production by quickly hiring new recruits, many of whom later staged violent protests after saying they were misled about compensation and Covid protections.
Widespread frustration with the zero-tolerance Covid policy led the Chinese government to abandon the measures weeks later.
Liu said Foxconn is diversifying some of its production lines away from China to countries including Mexico and Vietnam, where he said the firm is manufacturing some “national security products”, likely meaning data centre servers that handle sensitive information.
He said rising tensions between the US and China have so far not put pressure on Foxconn’s model of manufacturing products for US companies on the mainland, but that the company is undertaking “business continuity planning” for a “worst case” scenario in which Taiwan could be blockaded or invaded.
‘Android of EVs’
Liu also emphasised Foxconn’s investments into electric vehicles (EVs), a major theme of the company’s latest annual report published at the end of May, in which it says it wants to “become the Android platform of the electric vehicle industry”.
Foxconn, which has made only a handful of EV models so far, wants to capture about 5 percent of the global electric vehicle market over the next few years.
He said EV production would be regionalised, with Foxconn planning car factories in the US state of Ohio, Thailand, Indonesia and perhaps India.
The Indian press reported that government officials were in Taiwan over the weekend to discuss a potential production line for two-wheeled EVs in the country, which would be intended to serve the Southeast Asia market.
Foxconn has car manufacturing arrangements in place with Taiwan’s Yulon Group, The US’ Fisker and Lordstown Motors, Thailand state oil company PTT and others.
Last November it inked a deal with the Saudi Public Investment Fund to create a new EV rand called Ceer.