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

Cambodia Seeks Official UN Maps for Vietnam Border

Notice of request comes as 2 countries open border talks Tuesday after a clash last month More

From South Africa to Vietnam, Cyclists Deliver Message Against Rhino Horns

Appalled by poaching they saw firsthand, sisters embark on tour to raise awareness in countries where rhino horn products are in demand More

Uber Wants Johannesburg Police Protection

Request follows recent protests outside ride-hailing service's Johannesburg office More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
New Implant Could Help Restore Movement to Paralyzed Limbsi
|| 0:00:00
...    
🔇
X
Maia Pujara
July 07, 2015 10:01 PM
A half-million people suffer spinal cord injuries each year because of car accidents, serious falls and diseases, according to the World Health Organization. Researchers are now working on a soft but strong spinal cord implant that could one day restore movement in paralyzed individuals. VOA’s Maia Pujara reports.
Video

Video New Implant Could Help Restore Movement to Paralyzed Limbs

A half-million people suffer spinal cord injuries each year because of car accidents, serious falls and diseases, according to the World Health Organization. Researchers are now working on a soft but strong spinal cord implant that could one day restore movement in paralyzed individuals. VOA’s Maia Pujara reports.
Video

Video Getting it Done Beyond a Nuclear Deal

If a nuclear deal is reached between Iran and world powers in Vienna, it will be a highly technical road map to be used to monitor nuclear activity in Iran for years to come to ensure Tehran does not make nuclear weapons. Equally as complicated will be dismantling international sanctions that were originally intended to be ironclad. VOA’s Heather Murdock talks to experts about the key challenges any deal will present.
Video

Video Rice Farmers Frustrated As Drought Grips Thailand

A severe drought in Thailand is limiting the growing season of the country’s important rice crop. Farmers are blaming the government for not doing more to protect a key export. Steve Sandford reports from Chiang Mai, Thailand.
Video

Video Making Music, Fleeing Bombs: New Film on Sudan’s Internal Refugees

In 2012, Sudanese filmmaker Hajooj Kuka went to make a documentary among civil war refugees in Sudan’s Blue Nile and Nuba Mountains region. What he found surprised him: music was helping to save people from bombing raids by their own government. VOA’s Carolyn Weaver has more.
Video

Video 'From This Day Forward' Reveals Difficult Journey of Transgender Parent

In her documentary, "From This Day Forward", filmmaker Sharon Shattuck reveals the personal journey of her transgender father, as he told his family that he always felt he was a woman inside and decided to live as one. VOA’s Penelope Poulou has more.
Video

Video Floodwaters Threaten Iconic American Home

The Farnsworth House in the Midwest State of Illinois is one of the most iconic homes in America. Thousands of tourists visit the site every year. Its location near a river inspired the design of the house, but, as VOA’s Kane Farabaugh reports, that very location is now threatening the existence of this National Historic Landmark.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.

VOA Blogs

World Currencies

EUR
USD
0.9084
JPY
USD
122.73
GBP
USD
0.6431
CAD
USD
1.2639
INR
USD
63.444

Rates may not be current.