In the past, it has been rumored that at Apple's request, Foxconn will build new factories overseas to gradually replace the market share of domestic foundry iPhones, and in the past, this news was more lip service, but over time, Foxconn has prepared to invest in India to build the first overseas iPhone foundries.
The news was quoted by Bloomberg as saying that Foxconn Technology Group plans to invest about $700 million (4.5 billion yuan) in India to build a new factory in order to accelerate the transition away from the excessive dependence on us for iPhone production when the international situation deteriorates.
As we all know, Foxconn is the world's largest foundry for Apple's mobile phones, while Zhengzhou, Henan Province, has the world's largest iPhone assembly plant, employing more than 200,000 workers.
During the new crown epidemic last year, the Zhengzhou factory was ravaged by the new crown virus, which caused many workers to be unable to go to work, and eventually had a serious impact on the survival of the latest Apple mobile phone.
Affected by this incident, Apple CEO Cook accelerated the transfer of supply chains to reduce risks, and in this context, India has undoubtedly become a better choice.
First of all, Foxconn already has a factory in India to produce Apple phones, and the new factory will be Foxconn's largest investment in India to date.
According to Bloomberg, Foxconn's new plant in India will be located near the airport in Bangalore, the capital of the southern Indian state of Karnataka, covering an area of 300 acres, and the factory will not only produce iPhone parts, but also assemble Apple headphones.
Foxconn's move is likely to signal the risk that we may lose the world's largest consumer electronics production base.
Not only Apple, but other big international brands are also pressuring suppliers who currently rely on domestic factories for the possibility of shifting production lines to India or India, etc.
Behind the shift of supply chains is a series of changes in the global situation under the background of the new crown epidemic and the conflict between Russia and Ukraine.
According to experts' forecasts, Foxconn's new factory in India, once completed, could greatly increase the supply of iPhone parts in India and increase India's current iPhone production from less than 5% of global production to 10-15%.
According to some Indian officials, "the plant will be built quickly, creating 100,000 new jobs." ”
Theoretically, under the current global layout of iPhone foundry, the new employment opportunities are the lost employment opportunities, in the context of the global supply chain transfer, whether it is Apple or other brands, behind all the migrated supply chains, it is bound to represent lost jobs.
The reason why Foxconn chose India to build a new factory is because after us, India is very likely to become the second "Chinese miracle".
In the past, we have been known as the locomotive of the world economy, this sentence is not false, we maintain more than 10% economic growth a year, to a large extent pull the upper limit of world economic growth, and as the world's largest population country, our locomotive status is self-evident.
But with the advent of our declining and aging population, India is very likely to assume the role of "locomotive" in the near future.
First of all, from the perspective of economic growth, India's GDP growth in 2022 is as high as 6.7%, and the total GDP in US dollar terms will reach 3.38 trillion US dollars, exceeding the total economic output of the United Kingdom and close to 80% of Japan's, while our economic growth in 2022 will be less than half of India's, 3%.
And from the perspective of demographics, India also has a greater latecomer advantage than us.
As our population begins to decline in 2022, India's population structure is relatively young and will continue to increase until 2060.
In other words, India's emergence as the world's number one power is also a sure thing.
According to the United Nations' World Population Prospects, compared with us who peaked in 2021, India's population will continue to increase until 2060, eventually approaching 1.7 billion people, and India's domestic consumption proportion is also higher than ours, which also means that the Indian economy is more "healthy", accounting for up to 60% of GDP, personal consumption, will support India's long-term economic growth.
In addition, India's population structure is also more "young" than us, our median population is 38.5 years old, while India's population structure is ten years younger than ours, India's median population is only 28 years old, theoretically India's population structure is younger, and therefore more dynamic.
After all, a young population usually means that the future is promising, whether it is consumption or production, young represents a future.
Therefore, it is not surprising that Foxconn chose India as an investment location for new factories today.
This is also likely to be another major shift in the global supply chain after the United States, Japan, the Asian tigers, and us.
In the manufacturing industry in the context of globalization, there is usually only one indicator to shift, and that is cost control.
In the past, the United States was a manufacturing country, and as labor costs increased, Japan replaced it, and when Japan's labor costs began to rise, orders flowed to the Asian tigers, and as we opened up, orders shifted to us.
This trend is at most a few decades, and now it is India's turn.
Of course, even if Foxconn invests $700 million to build a new factory in India, it still can't stop the leading position of domestic foundry iPhones in the short term, but this trend does need to be paid attention to.
While our manufacturing position remains unstoppable for a short time, this impasse may be broken someday in the future as the trend continues to spread.
Just as the current dilemma faced by foreign trade, according to the field investigation of Wu Xiaobo's choreographer team, the empty container situation in Ningbo Port has indeed appeared a very unusual phenomenon, from the past a box is difficult to find, to the current empty box pushing, which is enough to reflect some problems.
Foxconn such a head foundry, its every move is naturally under our noses, it is difficult not to be discovered, but in addition to Foxconn, there are more factories, may have already shifted the supply chain, or reduced the demand for domestic orders, such small enterprises we may not see, but does not mean that there are none.
This year, the price of wages in Dongguan, Guangzhou and other places has fallen again and again, coupled with the accumulation of empty containers in Ningbo Port, we can combine the two to show some problems.
Many people have no job to find anymore, can't go to Dongguan to enter the factory, can't go to other places to enter the factory?
Such an idea seems normal, after all, the market is like this, there are gains and losses, some people go and some people stay, but the problem is that there is income when entering the factory, and there will be a difference in income, some jobs are higher, some jobs are lower, and some jobs are more secure.
How can a leading OEM like Foxconn create millions of jobs for us? The tertiary industry behind it, the surrounding supporting facilities, its impact on the population is no less than 10 million.
For those small and medium-sized factories, the inability to receive orders and receive more orders than in previous years means stopping recruitment or giving employees a holiday.
We can say that this is the case for a factory, but if more and more factories are like this, it is not just a problem of individual cases, it has become a special phenomenon behind it.
If more and more "Foxconn" begin to relocate, we have to start thinking about this serious question, how to retain them?
At the micro level, the retention of a manufacturing industry determines the livelihood of hundreds or even tens of thousands of families, and determines their source of income and life hope.
From a macro point of view, manufacturing foreign trade orders not only determine domestic employment, but also determine our economic growth, and the importance of foreign exchange.
Manufacturing was the cornerstone of supporting the domestic economy in the past, and it should continue to play a role as a cornerstone of the economy on the basis of transformation in the future.
"Foxconn" represents a specific enterprise and factory in the manufacturing industry, and their stay is not only related to individuals, but also to a society's employment, income, and expectations for the future.
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Author: Luo Sir, the workplace reference of the new youth. Concerned about the logic behind the development of things, optimistic pessimists. Follow me and grind up the knowledge to show you.