A few days ago, it was reported that India’s iPhone production in March this year was four times that of last year, accounting for nearly 7%, showing that both Apple and Foxconn are accelerating the increase in India’s iPhone production capacity, highlighting their determination. will have a profound impact.
1. Foxconn has a huge impact on Chinese manufacturing
The data for 2021 shows that among the top ten exporters in China, Foxconn in Zhengzhou, Foxconn in Shenzhen, and Foxconn in Chengdu rank first, fourth, and fifth in China's exports respectively. This shows how influential Foxconn is on China's manufacturing exports. If Considering the huge number of industrial chain enterprises driven by Foxconn, the impact is very far-reaching.
During the peak period, Foxconn recruited 1.3 million employees in China. In addition to Foxconn’s supporting industrial chain enterprises, the number of jobs affected is estimated to be over 10 million. It is precisely because of the large number of jobs brought by Foxconn that Foxconn in Zhengzhou is surrounded by With Foxconn forming a huge small town.
Foxconn mainly exports iPhones. Apart from Foxconn, Changshuo Technology, which is an OEM for Apple, ranks seventh; Luxshare Precision and Lens Technology, which supply accessories for Apple, have rapidly grown into 100 billion companies. Driven by China's mobile phone industry chain, China's mobile phone industry chain has gradually changed from providing only mobile phone cases in the early days to now providing core components for Apple.
Apple has also brought huge profits to Chinese industry chain companies, as OFILM, which was kicked out of the industry chain by Apple, showed that Apple provided it with 40% of its revenue, but contributed 90% of its profits; BOE will become an Apple supplier for the first time in 2021 , the profit obtained in that year is equivalent to the sum of the previous 10 years.
These performances of industrial chain companies highlight that Apple can bring huge profits, and then provide profits for these industrial chain companies to promote technological innovation. The innovative technologies of these industrial chain companies in turn feed Chinese mobile phones, making Chinese mobile phones gradually become an important pillar of the global mobile phone market. At the peak, Chinese mobile phones accounted for nearly 60% of the global mobile phone market.
Foxconn founder Terry Gou is precisely because of Foxconn's huge influence on China's manufacturing industry. He once claimed that Foxconn would "reward food" for the mainland. Terry Gou's arrogant remarks are a bit forgetful. When Terry Gou entered the mainland to start a business, Terry Gou's Hon Hai company was Taiwan Province is not even ranked. Since Guo Taiming was an early Taiwanese businessman who invested in mainland China, mainland China gave him many preferential policies. When Zhengzhou Foxconn established a factory, all parties provided support to allow it to be established in just two years. The factory building, and then the local people were mobilized to enter the Foxconn factory, and the number of Foxconn employees in Zhengzhou was quickly increased to more than 300,000.
2. It is not easy for Foxconn to replicate its success in India
Due to the great success of Foxconn in mainland China, Foxconn founder Terry Gou believes that he can quickly replicate a Foxconn in India. However, from its development in India, it can be seen that it is not so easy to create another Foxconn in India, and it is more important to succeed in the short term. is almost impossible.
Foxconn set up an Apple OEM factory in India as early as 2019. However, by the end of 2022, its largest factory in India will have only 17,000 employees, which is one year longer than Foxconn in Zhengzhou, but the number of employees is only One-twentieth of the early days of Zhengzhou Foxconn.
Even so, Foxconn's largest factory in India still has frequent problems. Employees believe that the intensity of overtime work is too high, and problems in the canteen have caused the factory to shut down. Under such circumstances, Foxconn made a bold statement that it will increase the number of employees in the Indian factory by 53,000 to 70,000 in the next three years, and even transfer the 300 billion production capacity in mainland China to India.
But as mentioned above, the factory with only 17,000 people has frequent problems and it took 3 years. If the scale of employees is expanded to one million in India, I don’t know how long it will take. The labor intensity of existing employees in India is far lower than that of Zhengzhou Foxconn. If the number of employees reaches one million and the labor intensity increases, it is almost impossible for Indian factories to realize it.
The technology and quality of the Indian factory can't meet Apple's requirements. At the end of last year, it was reported that the yield rate of the iPhone 14 produced by the Indian factory was only half, and the iPhone produced obviously had too large gaps. Due to the low education level of Indians, Foxconn It is also impossible to find sufficiently high-level skilled workers in India, which is a problem faced by Indian factories.
Another key issue is the industrial chain. In fact, Foxconn’s development in the Indian market was proposed nearly 10 years ago, but it suffered repeated setbacks until it cooperated with Xiaomi to build a factory in India in 2017. However, more than five years have passed. , India’s industrial chain foundation is still very weak. iPhones produced in India need to be transported long distances from China. It also submitted applications to India for these 17 Chinese industrial chain companies, and in the end only 14 companies obtained permission from India.
All these problems have caused huge difficulties for Foxconn's development in India. Especially in the first half of last year, the Shanghai Pegatron factory stopped production for some reason. Apple hopes that the foundry can take over the production capacity of Shanghai Pegatron. However, factories in India, Vietnam and other places are all Unable to undertake, in the end it was Zhengzhou Foxconn who undertook and successfully completed the task, which highlighted the reliability of Chinese manufacturing and the huge flexibility of production capacity. This is also Apple and Foxconn's deep thinking on the transfer of production capacity. Arrogant remarks are too one-sided.