There are reportedly plans to move production from China, Vietnam, and India to the US as a result of American tariffs and import duties.
According to the Financial Times, Foxconn, a production partner of many major tech players, knows that the announced tariffs by the US government are causing concerns for companies like Apple and Amazon. CEO Young Liu emphasizes in an earnings meeting that production plans are being adjusted.
Tariffs Already Having an Effect
Foxconn produces the majority of chips for Apple‘s iPhones and other electronic products in China, India, and Vietnam. Due to the 10 percent US tariffs on Chinese goods and the planned reciprocal tariffs, much of that production is being relocated to the US.
In addition to electronics, Foxconn also builds AI servers. Liu expects the number of servers to double this quarter. This is partly due to the breakthrough of DeepSeek, as customers want to develop their own LLMs as a result. Therefore, there is more demand for AI servers, and cloud and network products are likely to account for half of Foxconn’s revenue this year.
This doubling is welcome: in the fourth quarter of 2024, net profit decreased by 13 percent. This is said to be due to a decline in non-operating income, while operating profit increased by 32 percent.