China's Henan Province Witnesses Decline in Smartphone Exports as Apple Expands Manufacturing Outside Mainland
Henan province in China experienced a 60.1% decline in smartphone exports in the first quarter, reflecting Apple's efforts to diversify production outside of mainland China. Foxconn and other Apple suppliers have been expanding their manufacturing supply chain in countries like Vietnam and India. India's iPhone exports are projected to reach $12.1 billion in Apple's current financial year.
In the first quarter, smartphone exports from Henan province decreased by 60.1% compared to the same period last year. This decline reflects Apple's efforts to diversify its production outside of mainland China.
According to data released by Zhengzhou's local customs authority, Henan province exported 6.65 million smartphones in the first quarter of this year. However, the data did not provide a breakdown of the handset exports by brand.
Last year, Henan province exported 57.6 million smartphones, which was a 14.5% decrease from 2022. This decline can be attributed to the resumption of production across all handset assembly facilities in Zhengzhou after the lifting of Covid-19 control measures. Apple's suppliers, including primary iPhone assembler Foxconn Technology Group, have been expanding their manufacturing supply chain in countries like Vietnam and India, the world's most populous nation.
Foxconn, also known as Hon Hai Precision Industry, intensified its diversification efforts last year due to challenges in meeting production targets. The company faced an exodus of workers who left over fears of coronavirus transmission, followed by violent protests over employee allowances.
To retain Foxconn's operations and investment in Henan province, a top Henan official engaged in discussions with Foxconn's chairman and CEO, Liu Young-way, in February last year. The Chinese Communist Party's Secretary in Henan, Lou Yangsheng, assured Liu that the government would provide comprehensive services to support Foxconn's local operations. This highlights mainland China's commitment to maintaining its significant role in Apple's manufacturing supply chain.
In December, Foxconn received approval to invest at least $1 billion in a plant in India, marking a major expansion of its production beyond China. India's iPhone exports have been growing significantly, with projections of reaching $12.1 billion in Apple's current financial year, up from $6.27 billion the previous year.
Indian conglomerate Tata Group recently made its debut on Apple's supplier list after acquiring Taiwanese firm Wistron Corp's factory in southern India. Tata is also exploring the possibility of acquiring Taiwanese electronics contract manufacturer Pegatron's iPhone assembly operations in India.
While Apple is expanding its investments in countries like India and Vietnam, it still considers mainland China as its primary manufacturing base. In fact, Apple added eight Chinese suppliers and removed four contractors in its past financial year, indicating a continued reliance on the Chinese supply chain.
Apple CEO Tim Cook emphasized the importance of China's supply chain, stating, "There's no supply chain in the world that's more critical to us than China."
Henan province in China experienced a 60.1% decline in smartphone exports in the first quarter, reflecting Apple's efforts to diversify production outside of mainland China.
Foxconn and other Apple suppliers have been expanding their manufacturing supply chain in countries like Vietnam and India.
India's iPhone exports are projected to reach $12.1 billion in Apple's current financial year.
Source: SCMP