According to official state media of Vietnam, Apple supplier Foxconn has agreed to spend $300 million with Vietnamese developer Kinh Bac City to expand its facilities in the north of the country in order to diversify and increase production. The action comes in response to a story this week claiming that Foxconn has begun producing Apple Watch prototypes in northern Vietnam.
According to the Tuoi Tre newspaper, the new factory built by the Taiwanese corporation on 50.5 hectares, which is a 125-acre parcel of land in Bac Giang province will create 30,000 local jobs. Foxconn, which has been operating in Bac Giang for 15 years, has shifted some of the production of its iPad and AirPods there. The capacity of the new factory or the products that would be manufactured there was not specified. According to the Vietnamese government, Foxconn invested $1.5 billion in the Southeast Asian nation last year.
A portion of the iPhone production has been moved by Apple from China to other regions, notably India, where it began making the iPhone 13 this year. In an effort to diversify away from China, manufacturers providing American brands are placing more and more emphasis on markets like Mexico, Vietnam, and India, the second-largest smartphone market in the world.
After reporting profits that beat expectations last week, Foxconn provided a cautious prediction for the upcoming quarter, citing waning smartphone demand following a pandemic-fueled surge.
Foxconn, formerly known as Hon Hai Precision Industry Co Ltd, has experienced a significant chip shortage that has hampered manufacturing as bottlenecks from the pandemic persisted and the Ukraine war further strained logistics networks.
