Foxconn, Pegatron Reportedly Considering Mexico Factories Amid Increased China Risk

Designed by Apple in California. Made in… Mexico?

For years, iPhones (or their boxes) have said that they were “designed by Apple in California. Assembled in China.” But thanks to an escalating trade war between the US and China, that might not be true in the coming years.

Reuters reports that two of Apple’s biggest manufacturing contractors, Foxconn and Pegatron, are working to expand their facilities in Mexico, with an eye toward eventually building iPhones in the country.

Foxconn is expected to give a decision on the factory in late 2020, with work on the facility anticipated to start shortly after the choice is made.

Foxconn already has a significant presence in Mexico. Five Foxconn factories in Mexico make televisions, servers, and other products. But building iPhones could represent a major expansion of Foxconn’s activities in the Latin American country.

Sources told Reuters that Taiwan-based iPhone contractor Pegatron is also considering a shift to Mexico, but few details about its plans are known.

Mexico is an attractive place for companies to locate labor-intensive manufacturing. It’s 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 deal with Canada and Mexico earlier this year, reducing uncertainty about the US-Mexico trade relationship.