In a sign that Apple will expand its production capacity outside China in the wake of the tense geopolitical situation and uncertainty, the iPhone maker’s biggest contract manufacturer and partner, Taiwan’s Foxconn Technology Group and Pegatron Corp. have included Southeast Asia in their expansion plans for this year, says a report by news agency Bloomberg.
“We will continue to grow our scale in mainland China, the Americas and Southeast Asia, and these efforts will blossom in 2023,” Young Liu, Chairperson of Foxconn’s flagship unit Hon Hai Precision Industry Co., was quoted as saying by Bloomberg, at a company event on Sunday.
In a similar attempt, to increase its production capacity outside China, Pegatron, another key contract iPhone manufacturer will allocate $300 million-$350 million in 2023 to capital expenditure, partly to grow capacity in Southeast Asia and increase automotive component production in Mexico.
This development comes amid Apple’s plans to shift from Samsung and LG and make its own custom displays for devices by as early as 2024. The Cupertino-based tech giant is aiming to start changing the display in the highest-end Apple Watches by the end of 2024, Bloomberg recently reported. This is Apple’s bid to reduce its dependency on display technology partners such as Samsung and LG and introduce more in-house components.
Meanwhile, Taiwan Semiconductor Manufacturing Company Limited, popularly known as TSMC, which is one of the key iPhone makers for Apple has said it would more than triple its planned investment at its new chip manufacturing plant in the US state of Arizona to $40 billion, among the largest foreign investments in US history.
To recall, earlier in November 2022, Apple said it is planning to use chipsets from a factory in the US state of Arizona starting in 2024, in an attempt to reduce its dependency on Asian production, which has been disrupted due to workers’ unrest in China. The tech giant is also planning to source chips from Europe in the future.