Hundreds of Chinese engineers and technicians employed at Foxconn’s facilities, Apple’s primary supplier, were urged to leave as the company prepared to increase manufacturing of its next flagship iPhone in India.
According to various media reports, more than 300 highly qualified employees have left Foxconn’s iPhone factories in southern India. Although neither Apple nor Foxconn have made a formal statement, the timing and lack of response say a lot.
This advancement goes beyond a simple reorganisation of personnel. It coincides with rising tensions between Beijing and Western tech companies that are moving their manufacturing out of China, as well as the India-China border issue.
The loss of skilled Chinese technical employees is a blow to Apple, which has made significant investments to increase its manufacturing presence in India. In addition to putting devices together, these experts trained Indian workers and imparted decades of process knowledge developed inside Chinese mega-factories.
Chinese Government Clamping Down on Various Elements to Hamper the Production
In recent months, China’s crackdown on the exodus of talent, equipment, and technology has intensified.
A media source claims that the Chinese government has gently persuaded businesses and authorities to limit the flow of talented workers to countries like India and Southeast Asia and to cease exporting vital equipment.
It appears that the goal is to slow down the “China plus one” method that global corporations are using to protect themselves from geopolitical risk.
China has tightened control over APIs for the global pharmaceutical supply chain, limited exports of rare earth magnets used in electric vehicles, and, now, through its hold on Foxconn, has started to repress talented mobile manufacturing workers. Trade friction is no longer the only issue. Supply chain resistance is the cause.
Foxconn Swaps Chinese Engineers for U.S., Taiwan Specialists Amid Strategic Shift
The multinational electronics powerhouse has devised a different strategy to save its iPhone 17 production in India by bringing in specialists primarily from Taiwan and the US.
This development comes a day after it was revealed that Beijing had “forced” Foxconn Technology Group to return its Chinese engineers and technicians from its Tamil Nadu plant. Recalling workers is perceived as a tactic to thwart Western IT companies’ attempts to move their manufacturing out of China.
Additionally, it is perceived as an extension of the diplomatic dispute between China and India. The export of essential machinery needed to upgrade assembly lines to produce the iPhone 17, which is anticipated to be released by September of this year, was already being restricted by Chinese officials.
As anticipated, a media article stated that Foxconn already had a strategy to hire engineers primarily from the US and Taiwan. Furthermore, the problem only relates to the upcoming debut of the new iPhone 17 series.
For earlier versions, Indian technicians are already in charge. The replacement of the Chinese experts might take up to two months. The Ministry of Electronics and Information Technology (Meity), according to the report, stated that Foxconn and Apple have been aware of the potential loss of Chinese engineers for the past four to five months.
The import of essential equipment can still be an issue even if technicians are replaced. The iPhone 17’s price may rise as a result. However, according to industry experts, the average compensation for a US expert is approximately six times that of a Taiwanese expert.
Further, the average compensation for a Taiwanese expert is approximately 50–60% higher than that of a Chinese engineer. This could result in an increase in the production costs for the company.
India Benefiting from US-China Trade Tension
Trade conflicts between the US and China, which started under former President Donald Trump, are the direct cause of Apple’s entry into India.
These tensions have now developed into strategic actions on both sides, with China retaliating with limits on technology, talent, and raw materials and the United States providing tax incentives and trade agreements to nations like Vietnam and India.
Though it might not seem as dramatic, China’s most recent action might be just as destructive as a trade battle. The risk is growing on both sides for Apple, which intends to manufacture the majority of iPhones for the US in India by 2026.
Trump has once again called on Apple to “make in America” in his most recent campaign speech. However, Apple has so far steered clear of that route due to the high cost of US labour and a lack of experience with large-scale manufacturing.
Now that China is exerting pressure behind the scenes, even Apple’s backup plan in India can encounter difficulties.
In the months preceding the release of the iPhone 17, it will become evident if China has successfully halted the changing axis of tech manufacturing or whether Apple can withstand the transition without compromising its production targets.
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