News Briefing

 

On the 14th, Foxconn Group announced on behalf of its subsidiary, the Fulian Precision Technology Component Co. Limited, that it will spend VND1.48 trillion (approximately NT$1.897 billion) to acquire 451,100 square meters (approximately 136,500 level ground) of land at the Quang Chau Industrial Zone, Viet Yen District, Bac Giang Province, Vietnam.

 

Impact Analysis

 

Being affected by the planned decentralized manufacturing capacity of Apple, plants (including related OEM manufacturers such as Hon Hai, Wistron, Pegatron, Luxshare, and others), have worked in response to Apple's decentralized strategy to keep the orders, and Foxconn’s enthusiasm for transferring production capacity to Southeast Asia in recent years has been relatively significant and prominent compared to its peers. As a major supplier of iPhone, the global production bases of Foxconn currently include Taiwan, China, Vietnam, India, Hungary, Slovakia, the Czech Republic, Brazil, the United States, and Mexico, while its two main factories in Vietnam are located in the Bac Ninh and Bac Giang Province. As for the location of its investment this time at Quang Chau Industrial Zone (the largest industrial zone in Bac Giang Province), it is reckoned to be an additional investment by Foxconn. If we observe in detail the investment of Foxconn in Bac Giang Province, we can start by tracing back from New Wing Interconnect Technology Limited, a reinvestment via share purchase in 2016, and we can realize that, as a matter of course, it would be followed by the establishment of new factories or expansions almost every year. So far, the Bac Giang Province in North Vietnam has already become Foxconn’s manufacturing base in Vietnam. If the production capacity in Bac Ninh Province is also to be included, Vietnam may be said to be the second largest production base of Foxconn around the world.

 

In addition to iPhone, iPad, Apple Watch, AirPods, MacBook, and other major Apple products that have persistently been shifted to Vietnam for production, we can find similar signs showing up for other brands. If, for example, we take notebooks, it is estimated that about 10% of the laptops worldwide will be manufactured in Vietnam based on the data released by TrendForce in early 2023. As for smartphones, all the other five major brands (except Apple, Samsung, and Xiaomi) will also manufacture their products in Vietnam. Hence, Vietnam has become an important production center and hub for consumer products among Southeast Asian countries. As smartphones and notebook computers account for a considerable proportion of the output value for Taiwan's PCB industry, such a context is very likely to trigger manufacturers to set up plants in Vietnam or other Southeast Asian countries for production, though some others may also be points of consideration by the manufacturers. Anyhow, should we come in from the perspective of being closer to the needs of the customers, it is quite inevitable that the increase of production proportion for terminal customers in Vietnam will, surely, form a pulling force for the PCB manufacturers.