apple partners Foxconn Technology Group and Pegatron announced plans to expand into Southeast Asia in 2023 as part of efforts to mitigate geopolitical and economic risks. Foxconn president Liu Yang at a company event Will continue to expand China, America and Southeast Asia, these efforts will bear fruit in 2023 told.
Pegatron, Foxconn’s smaller competitor, will set aside $300 to $350 million for capital expenditure this year, in part to increase capacity in Southeast Asia and auto parts production in Mexico. The company is also a supplier to Tesla.
Both Foxconn and Pegatron are currently in China and India iPhone manufactures and Apple is using Vietnam as an alternative manufacturing base for other products such as AirPods. Pegatron will increase production capacity in Vietnam and Indonesia, it already has existing factories, the company does not currently manufacture Apple products in these two countries. Foxconn did not specify which Southeast Asian countries it plans to expand to.
The expansion plans of these major contract electronics manufacturers are in line with the trend to diversify supply chains that began and continued during the Trump era, when the US president imposed high tariffs on some Chinese imports in the trade war with China. China’s prolonged coronavirus-induced quarantine has disrupted supply chains and accelerated diversification efforts.