Terry Gou, departing founder of Apple’s biggest supplier Foxconn, has urged Apple to move manufacturing out of China. Gou suggests that Apple select neighboring country Taiwan as a location.
This would allow Apple to avoid any tariffs that come from the United States’ burgeoning trade war with China.
“I am urging Apple to move to Taiwan,” Gou said. Speaking about whether Apple would likely move manufacturing from China, Gou said he thought it is “very possible.”
Getting out of China
Recently Apple asked its main suppliers to evaluate the cost of shifting 15% to 30% of their production from China to Southeast Asia. This is partly in response to the burgeoning U.S. trade war with China. However, it’s also because of increased costs in China and the risks of centralizing production in one country.
Foxconn has told Apple that it had the capacity to build all U.S. iPhones outside China. Foxconn isn’t the only company looking beyond China, either. Apple supplier Wistron started producing iPhones in India a couple years back. Pegatron has also talked about moving iPad and MacBook production out of China.
But some analysts have pointed out that moving manufacturing out of China could be a tall order for Apple right now. Not only would it prove difficult to do, they say, but Apple is additionally experiencing plenty of other challenges. In other words, a headache such as this may be the last thing Tim Cook and co. want.
Bloomberg also notes that shifting production to Taiwan, which China believes is part of its territory, could cause big political tensions.