News / Economy

Apple Contractor Foxconn Seeks Wider Reach after China Flaps

FILE - Employees work at a Foxconn factory in Wuhan, Hubei province, China.
FILE - Employees work at a Foxconn factory in Wuhan, Hubei province, China.
Ralph Jennings
Foxconn is known as the company that assembles iPads and iPhones for the world with inexpensive labor in China. Now, the giant contractor is trying to diversify clientele, geography and means of production to grow its business as workplace issues haunt it in China. Foxconn’s latest ambition calls for investing $1 billion in the capital of smartphone-savvy Indonesia.
 
Giant Taiwanese contract electronics maker Foxconn normally uses factories in mainland China to make products for the world’s top electronics brands, such as Apple and Sony. But since 2010, the company has been stung there by worker suicides and labor protests. This month, Foxconn signed a deal to invest $1 billion in high-tech research and development in Indonesia.
 
Jamie Wang, a principal research analyst with the market research firm Gartner in Taipei, said Indonesia gives Foxconn a welcome alternative to China.
 
Wang said Foxconn needs a new production site and that Indonesia offers not only an end-market business opportunity but that, in terms of the production costs, Indonesia offers good value. Another key is whether the local government and its infrastructure give Foxconn attractive incentives or support. As she understands, Jakarta offered Foxconn a substantial support package.
 
Foxconn’s agreement with the city of Jakarta follows a deal in November to spend $40 million on robotics, a relatively new field for the company, in the U.S. state of Pennsylvania. The manufacturer, also known as Hon Hai Precision, said it was studying three other U.S. states for investment. A spokesman said U.S. investments would cast Foxconn as a global company, not a Chinese one. At its home base in Taiwan, Foxconn won a license last year to offer 4G mobile services, another departure from its normal contracting business.
 
Foxconn Chairman Terry Gou hinted at a company year-end party last month in Taiwan that Foxconn would rely less and less on worker-intensive factories in the future. Some see the comment as a sign he is turning away from Chinese workers who have protested Foxconn’s conditions.
 
Gou said manufacturing remains Foxconn’s core business, but because younger people worldwide don’t want to work in factories, manufacturing must rely more on automation.
 
Analysts said the push away from China is not just about shaking off labor problems. Some argue that the company, which earned $130 billion in revenues last year, is also reviewing its relations with Apple. Foxconn is Apple’s largest manufacturer, assembling its products at seven bases between China and Brazil. However, margins may be low as Apple takes on new suppliers. John Brebeck, a senior adviser with Taipei-based Quantum International, pointed out the limitations of working with Apple.
 
“Nobody makes that much money off Apple. You’d have to basically make that product only for them. You have to buy equipment that’s only good for them. I do know that Hon Hai, they make money on Apple but it’s not really high margin. And also every year the Apple supplier list includes more and more Chinese companies,” said Brebeck.
 
In the United States, the government is offering financial incentives to companies such as Apple that make products onshore instead of overseas, a possible threat to Foxconn’s factories outside the country.
 
In Indonesia, Foxconn calls its three- to five-year investment a chance to sell products to a young, smartphone-crazy local population. It plans to develop smartphones, panels and cloud computing tools just in Jakarta for now, but said it is looking at branching out into other parts of Indonesia and other Muslim countries later.

You May Like

Video In Ukraine's Nikishino, No House Untouched by Fighting

Ninety percent of homes in one small village were damaged or destroyed as government forces failed to stop a rebel advance More

Pakistan’s 'Last Self-Declared Jew' Attacked, Detained

Argument about the rights of non-Muslims in Pakistan allegedly results in mob beating well-known Jewish Pakistani More

Turkey Cracks Down on Political Dissent, Again

People daring to engage in political dissent ahead of upcoming general elections could find themselves in jail More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
In Their Own Words: Citizens of Kobanii
X
Mahmoud Bali
March 06, 2015 8:43 PM
Civilians are slowly returning to Kobani, after Kurdish fighters backed by coalition airstrikes fought off a four-month siege of the northern Syrian town by Islamic State militants. VOA Kurdish Service reporter Mahmoud Bali talked to some of those who have returned. We hear about the devastation of Kobani through their own words.
Video

Video In Their Own Words: Citizens of Kobani

Civilians are slowly returning to Kobani, after Kurdish fighters backed by coalition airstrikes fought off a four-month siege of the northern Syrian town by Islamic State militants. VOA Kurdish Service reporter Mahmoud Bali talked to some of those who have returned. We hear about the devastation of Kobani through their own words.
Video

Video In Ukraine's Nikishino, No House Untouched by Fighting

In the village of Nikishino, in eastern Ukraine, recent fighting has brought utter devastation. Ninety percent of the houses are damaged or destroyed after government forces tried and failed to stop rebels advancing on the strategically important town of Debaltseve nearby. Patrick Wells reports for VOA from Nikishino.
Video

Video Crime Scenes Re-Created in 3-D Visualization

Police and prosecutors sometimes resort to re-creations of crime scenes in order to better understand the interaction of all participants in complicated cases. A Swiss institute says advanced virtual reality technology can be used for quality re-creations of events at the moment of the crime. VOA’s George Putic reports.
Video

Video Sierra Leone Ebola Orphans Face Another Crisis

There's growing concern about the future of an orphanage run by a British charity in Sierra Leone, after a staff member and his wife died this week from Ebola. The Saint George Foundation Orphanage in Freetown is now in quarantine, with more than 20 children and seven staff in lock-down. The BBC has agreed to share Ebola-related material with Voice of America because of the difficulties faced by media organizations reporting the crisis. Clive Myrie reports from Sierra Leone.
Video

Video Growing Concerns Over Whether Myanmar’s Next Elections Will Be Fair

Myanmar has scheduled national elections for November that are also expected to include a landmark referendum on the country's constitution. But there are growing concerns over whether the government is taking the necessary steps to prepare for a free and fair vote. VOA Correspondent Steve Herman was recently in Myanmar and files this report from our Southeast Asia bureau in Bangkok.
Video

Video Nigeria’s Ogonis Divided Over Resuming Oil Production

More than two decades ago, Nigeria’s Ogoni people forced Shell oil company to cease drilling on their land, saying it was polluting the environment. Now, some Ogonis say it’s time for the oil to flow once again. Chris Stein reports from Kegbara Dere, Nigeria.
Video

Video Fuel Shortages in Nigeria Threaten Election Campaigns

Nigeria is suffering a gas shortage as the falling oil price has affected the country’s ability to import and distribute refined fuels. Coming just weeks before scheduled March 28 elections, the shortage could have a big impact on the campaign, as Henry Ridgwell reports for VOA.
Video

Video Report: Human Rights in Annexed Crimea Deteriorating

A new report by Freedom House and the Atlantic Council of the United States says the human rights situation in Crimea has deteriorated since the peninsula was annexed by Russia in March of last year. The report says the new authorities in Crimea are discriminating against minorities, suppressing freedom of expression, and forcing residents to assume Russian citizenship or leave. Zlatica Hoke has more.
Video

Video 50 Years Later African-Americans See New Voting Rights Battles Ahead

Thousands of people will gather to mark the 50th anniversary of a historic civil rights march on March 7th in Selma, Alabama. In 1965, dozens of people were seriously injured during the event known as “Bloody Sunday,” after police attacked African-American demonstrators demanding voting rights. VOA’s Chris Simkins introduces us to some civil rights pioneers who are still fighting for voting rights in Alabama more than 50 years later.
Video

Video Craft Brewers Taking Hold in US Beer Market

Since the 1950’s, the U.S. beer industry has been dominated by a handful of huge breweries. But in recent years, the rapid rise of small craft breweries has changed the American market and, arguably, the way people drink beer. VOA’s Jeff Custer reports.
Video

Video Video Claims to Show Shia Forces in Iraq Executing Sunni Boy

A graphic mobile phone video is spreading on the Internet, claiming to show Iraqi forces or Shia militia executing a handcuffed Sunni boy. Experts have yet to verify the video, but already Islamic State followers are publicizing it across social media, playing on deep-rooted sectarian fears. VOA’s Jeff Seldin reports.
Video

Video Ukrainian Authorities Struggle to Secure a Divided Mariupol

Since last month's cease-fire went into effect, shelling around the port city of Mariupol has decreased, but it is thought pro-Russian separatists remain poised to attack. For the city’s authorities, a major challenge is gaining the trust of residents, while at the same time rooting out informants who are passing sensitive information to the rebels. Patrick Wells reports for VOA.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

World Currencies

EUR
USD
0.9121
JPY
USD
119.93
GBP
USD
0.6585
CAD
USD
1.2465
INR
USD
62.397

Rates may not be current.