Inc. supplier Foxconn signed a memorandum of understanding with Vietnamese developer Kinh Bac City to expand smartphone production facilities at its Vietnamese factory, through a new investment of US$300 million, Saturday (20/8/2022).
Last week Foxconn was rumored to have started production test of the Apple Watch in northern Vietnam.
Foxconn’s strategy to expand its factory in Vietnam, Apple’s production in China, continues to experience setbacks, due to the regional restrictions imposed by the Chinese government to deal with the surge in Covid-19 cases in the city of Shanghai.
The rules of social restrictions by the Chinese government have disrupted the supply chain for Apple’s gadget production. Among them for the delivery of notebook computers and Apple Watch which became hampered.
This condition was further exacerbated by the escalating war between Russia and Ukraine, causing production from Foxconn to plummet.
Worried that this condition will further reduce Apple’s revenue, Foxconn racked its brains by shifting some of its production to North Vietnam.
It is not yet known what products or components will be produced at this new factory.
However, according to information quoted by Reuters, it is planned that the Apple Quang Chau Industrial Park factory covering an area of 50×5 hectares located in Bac Giang Province will be expanded to produce AirPods and iPads.
For information, Apple’s diversification into Vietnam has actually started since 2020, precisely when the trade war between Washington and Beijing broke out under former US President Donald Trump.
The good relationship that exists between Apple and Vietnam has even made Foxconn company willing to disburse an investment fund of 1.5 billion in 2021, to improve the facilities of the Apple Quang Chau Industrial Park factory.
With the injection of funds given to Vietnam, Foxconn hopes that Apple’s production can increase so that the company’s revenue can also increase, considering that Apple’s revenue is currently experiencing a weakening.