InvestorQ : Is it true that manufacturers are actually shifting out of China?
vidhya Laxmi made post

Is it true that manufacturers are actually shifting out of China?

sarah Leo answered.
12 months ago

A major manufacturing partner of Apple, Hon Hai Precision, will split its supply chain in two. While one segment will serve the Chinese market, the other will serve the US market. Hon Hai has already enhanced its non-China capacity from 25% to 30%.

For those who are not familiar with Hon Hai Precisions, it is better known in industry circles as Foxconn. It has been increasingly looking to move more manufacturing to Southeast Asia and other regions to avoid escalating tariffs on Chinese made goods in the US.

Foxconn pointed out that China will still be the key factory to the world but its importance will progressively reduce. Recent actions of Foxconn indicate that the China-centric electronics supply chain will fragment over the longer term, benefiting India in the process.

Foxconn could be a signal of the biggest trend in Asia as companies are shaking up traditionally China-focused operations. Foxconn has clarified that the shift could happen anywhere but clearly, a lot of Apple products are eyeing the lucrative Indian market.

There is a larger story at play and the US and India having problems with China are only the tip of the iceberg. Japan is looking to diversify its China risk and that would mean billions of dollars in terms of opportunities waiting in the sidelines for India.