Factory Relocation
Hon Hai Group, which owns Foxconn, announced that it is planning to relocate its Apple product manufacturing facilities from China to the United States. “We are planning to enter the United States and manufacturing iPhones and Macs there,” the company recently said.
Experts are pointing out that this is because of U.S. President-elect Donald Trump’s demand. During his election campaigns, he promised that he would have iPhone manufacturing facilities relocated to the U.S. and impose a tariff of 35% on products manufactured in China.
Under the circumstances, Apple began to examine the establishment of a factory in the U.S. and the President-elect responded by mentioning some incentives such as corporate tax cut.
Apple has made use of its manufacturing facilities in China for labor cost reduction above all things. At present, a labor cost of US$10 is required for Apple to manufacture an iPhone 7 in China and US$30 to US$40 is estimated to be added to it in the case of manufacturing in the U.S. This means that the price of the iPhone 7 can go up from US$649 to US$700. For this reason, Apple is predicted to utilize more robots in producing iPhones.