Foxconn to Build New China Headquarters in Effort to Cut Reliance on IPhone

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Over the past decade, Foxconn’s investments in Zhengzhou have focused on mobile phone assembly and component supply. Photo: VCG

Foxconn will establish a new headquarters in Central China’s Henan province to make electric vehicles (EVs) and batteries, as the Taipei-based contract manufacturer tries to reduce its dependence on assembling iPhones.

Foxconn, formally known as Hon Hai Precision Industry Co. Ltd., said in a stock exchange statement on Wednesday that its subsidiary Foxconn Technology Group has signed a deal with the Henan provincial government to invest 1 billion yuan ($138.2 million) to build a new headquarters in the provincial capital Zhengzhou.

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**New Headquarters in Henan:** Foxconn will establish a new headquarters in Zhengzhou, Henan province, investing 1 billion yuan ($138.2 million) to focus on EVs, batteries, digital health, and robotics.
**Strategic Shift:** The move is part of Foxconn's "3+3" strategy to diversify beyond iPhone assembly by leveraging smart manufacturing and supply chain resources.
**Declining Apple Dependence:** Foxconn’s iPhone production has faced challenges due to Apple diversifying its supply chain to India, alongside declining iPhone sales impacting Foxconn's workforce numbers.

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Who’s Who

Foxconn Technology Group: Foxconn Technology Group, a subsidiary of Hon Hai Precision Industry Co. Ltd., plans to establish a new headquarters in Zhengzhou, Henan province to produce electric vehicles and batteries. This $138.2 million investment aims to reduce its dependence on iPhone assembly, leveraging core competencies in smart manufacturing. The move is part of Foxconn’s “3+3” strategy, focusing on EVs, digital health, and robotics, amid challenges like Apple's supply chain diversification and declining iPhone sales.

Apple Inc.: Apple Inc. has been diversifying its supply chain by shifting part of its manufacturing capacity to India since late 2022. This migration comes amid declining iPhone sales, which fell 1% year-on-year in the second quarter of 2024, despite a 6% growth in the global smartphone market.

Samsung Electronics Co. Ltd.: Samsung Electronics Co. Ltd. experienced a 5% rise in sales during the second quarter of 2024, contrasting with a 1% decline in Apple’s sales. This was highlighted in a Counterpoint Research analysis. This growth places Samsung as the top vendor in the global smartphone market for that period.

Xiaomi Corp.: Xiaomi Corp., a Chinese smartphone vendor, saw a significant increase in sales, jumping 22% in the second quarter of 2024. This growth contrasts with the overall decline in iPhone sales during the same period.

Vivo Mobile Communications Co. Ltd.: Vivo Mobile Communications Co. Ltd. is a Chinese smartphone vendor mentioned in the article. In the second quarter of 2024, Vivo's sales grew by 9% year-on-year, showing positive growth despite a generally declining market for some competitors like Apple.

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