The US-China trade war, combined with the COVID-19 pandemic and subsequent global supply chain relocations, has benefited Foxconn due to its diversified global footprint.
Driven by market realities and customer demands, manufacturers that once relied heavily on China as their primary production hub are rapidly diversifying their global manufacturing capacities. This shift has led to a surge in investments in Southeast Asian countries such as Vietnam and Thailand, as well as in Mexico. However, the influx of manufacturing facilities has also increased costs and labor shortages in these regions.
Foxconn, with its expansive global manufacturing network, has naturally benefited from this production shift. The company continues investing in key regions like Vietnam, India, and Mexico in response to customer needs while maintaining a significant focus on investments within China.
Outside of China, Foxconn has manufacturing facilities across regions and has a total of 240 production bases, with ongoing investment plans in various locations.
Taking the recent push for domestic automobile production in Taiwan as an example, industry insiders have pointed out that countries like the US, India, and China are increasing their local production requirements, particularly for electric vehicles (EVs). As a result, the EV industry is inevitably moving towards more regionalized and localized production.
While definitions and interpretations of localized production ratios may differ by region, Foxconn's emphasis on the EV industry as part of its 3+3 strategy necessitates proactive planning for future market and customer demands. The company's continued global expansion is an integral part of this strategy. Given the increasing regional and national sentiments, the sustainability of current regional trade agreements cannot be assured.
Foxconn's investments in various locations aim to address current customer production needs and comply with potential future localized production ratio requirements in the electric vehicle market. This extensive network offers greater flexibility in adapting to overall production demands and provides Foxconn a competitive advantage that is challenging for other companies to replicate.
