Samuel Axon
For years, iPhones (like their boxes) have been said to be “designed by Apple in California. Assembled in China.” But thanks to an escalating trade war between the US and China, that may not be true in the coming years. Reuters reports that two of Apple’s largest manufacturers, Foxconn and Pegatron, are working to expand their facilities in Mexico with a view to eventually building iPhones there.
Foxconn travel is not definitive, reports Reuters. Apple did not comment on the idea and declined to comment to Reuters. But Foxconn is expected to make a final decision this year.
Foxconn already has a significant presence in Mexico. Five Foxconn factories in Mexico manufacture televisions, servers, and other products. But building iPhones could represent a major expansion of Foxconn’s activities in the Latin American country.
This is not Foxconn’s only attempt to diversify from China. Last year, Foxconn announced plans to start making iPhones in India, and the company is now making the iPhone SE there.
Sources told Reuters that Taiwan-based iPhone contractor Pegatron is also considering a move to Mexico, but few details about its plans are known.
Mexico is an attractive place for companies to find labor-intensive manufacturing. It is close to the United States, while workers there tend to earn lower wages than in the US or Canada. The Trump administration signed an updated trade agreement with Canada and Mexico earlier this year, reducing uncertainty over the US-Mexico trade relationship.
But the COVID-19 outbreak could hamper efforts to shift iPhone production from China to Mexico. China has removed the virus almost domestically, while Mexico has had limited success. Mexico has reported about 6,000 confirmed cases per day in recent weeks. That is better than the US on a per capita basis, but much worse than China.
At the same time, the declining relationship between the US and China, especially over high-tech products, gives companies like Foxconn strong reasons to diversify. Earlier this month, for example, Donald Trump announced that he would force TikTok and WeChat out of the US market.
