As it navigates a new era of icy US-China relations, iPhone manufacturer Foxconn is placing large bets on electric vehicles and redrawing some of its supply chains.
During a one-on-one interview, Young Liu, the chairman, and CEO of the company, shared with the BBC his perspectives on what lies ahead for the Taiwanese firm.
Betting on Electric Cars Amidst US-China Relations
In light of Foxconn’s shifting supply chains away from China, Chairman Young Liu emphasized that the growth of the company in the coming decades will primarily be driven by electric vehicles (EVs).
As tensions escalate between the United States and China, Mr. Liu expressed the need for Foxconn to prepare for potential challenges.
These scenarios could include Beijing’s attempts to block Taiwan, a self-governed island that China claims as part of its territory or even a possible invasion.
To ensure business continuity, Mr. Liu stated that Foxconn has already initiated plans and is in the process of relocating certain production lines, particularly those associated with national security products, from China to countries such as Mexico and Vietnam.
The mention of these products likely refers to servers manufactured by Foxconn that are utilized in data centers and may contain sensitive information.
Officially known as Hon Hai Technology Group, Foxconn was established in 1974, initially producing knobs for televisions. It has since become one of the world’s leading technology companies, generating an annual revenue of $200 billion (£158.2 billion).
While widely recognized for manufacturing over half of Apple’s products, including iPhones and iMacs, Foxconn also serves notable clients such as Microsoft, Sony, Dell, and Amazon.
For decades, Foxconn has followed a successful multinational corporation approach, wherein products are designed in the United States, manufactured in China, and then distributed worldwide. This strategy has propelled the company from a small component manufacturer to the consumer electronics giant it is today.
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Taiwan’s Uncertain Future
As the relationship between the United States and China sours, Foxconn finds itself in a challenging position, caught between the world’s two largest economies that have been crucial to its growth thus far.
The tensions between the US and China encompass various issues, including trade disputes and conflicts such as the situation in Ukraine.
However, one of the most significant potential sources of conflict lies in Taiwan, where Foxconn is headquartered.
Taiwan has long been a contentious matter, but recent statements by Chinese leader Xi Jinping advocating for reunification have unsettled the delicate balance. Concurrently, the US, particularly under President Joe Biden, has been more assertive in expressing support for Taiwan in the event of an attack.
While some voices in America have crossed China’s red line by advocating for Taiwanese independence, the White House has reiterated its position of maintaining diplomatic relations with Beijing rather than Taipei.
There is hope for a thaw in the relationship between the US and China, as US Secretary of State Antony Blinken plans to visit China.
However, concerns persist about the possibility of conflict, with a US general estimating that it could occur within the next few years.
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