Apple Supplier Foxconn Expands Manufacturing Capacity in Vietnam

Foxconn, Apple’s biggest supplier and the company responsible for assembling the majority of the global iPhone supply, is expanding its manufacturing capacity in Vietnam with a new 45-hectare (111-acre) site located in the Quang Chau Industrial Park in the Bac Giang province east of Hanoi — reports South China Morning Post.

According to an exchange filing on Tuesday, Foxconn subsidiary Fulian Precision Technology Component Co. has signed a $62.5 million USD lease for the property that will run through February 2057.

The news follows a series of major investments from Foxconn to expand production outside of China, including additional investments in Mexico and a $500 million injection into its Indian operations with plans to quadruple manpower in the South Asian country over the next two years.

All of this comes after Foxconn’s production in China suffered several setbacks last year as the government instituted repeated COVID-19 lockdowns and the Apple supplier’s largest iPhone factory, located in Zhengzhou, weathered a protracted shutdown after violent employee protests broke out and thousands of workers left.

The manufacturing slowdown in China left Apple with a major deficit of flagship iPhones in its all-important holiday quarter, contributing to the company’s first drop in quarterly revenue since 2019.

“Covid-19 challenges … significantly impacted the supply of iPhone 14 Pro and iPhone 14 Pro Max and lasted through most of December,” Apple CEO Tim Cook said during the company’s earnings call earlier this month. Apple is urging all of its suppliers to diversify production beyond China.

Foxconn already manufactures iPads and AirPods in Vietnam. The company reportedly signed a $300 million agreement with a Vietnamese developer in August 2022 to build a new plant in the Bac Giang province, presumably at the newly leased location.

While there’s no word on what Apple products will be assembled at this planned facility, Foxconn is expected to start producing MacBooks in Vietnam by mid-2023. In addition, Foxconn has also been rumoured to be moving some Apple Watch production to the country.