Foxconn Technology Group, Apple’s biggest contractor, has invested $500 million in its Indian subsidiary as the Taiwanese manufacturing giant moves to diversify its supply chain after China’s strict pandemic controls halted production at its main iPhone plant in the central city of Zhengzhou.
The cash injection into Foxconn Hon Hai Technology India Mega Development Private Limited, made through Foxconn’s Singapore unit Foxconn Singapore Pte Ltd, involved the purchase of more than 4 billion shares, according to a filing Thursday with the Taiwan Stock Exchange.
The capital injection came as production at Foxconn’s Zhengzhou plant, the world’s largest iPhone factory and which usually hires 300,000 people at this time of year to cope with holiday orders, was severely hampered. by an exodus of tens of thousands of employees and workers protests that turned violent
As a result of the disruptions, the factory used just 20 per cent of its manufacturing capacity in November, according to an estimate last week by Kuo Ming-chi, an analyst who covers Apple at TF International Securities. The utilization rate is expected to increase in December, but only to 30 to 40 per cent, he said.
The importance of the Zhengzhou complex to Foxconn is highlighted in a letter company founder Terry Gou circulated to China’s leaders about a month ago, urging the country to change its zero-covid policies or risk damaging its key role in global supply chains, The Wall. Street Journal reported on Thursday.
Amid troubles in Foxconn’s “iPhone City,” Apple has been asking suppliers to prepare to make more products outside of China, particularly in India and Vietnam, The Wall Street Journal reported last week.
In August, Foxconn signed a $300 million deal with a Vietnamese developer to expand a new local plant and plans to quadruple the workforce at its Indian iPhone-making plant in two years, Reuters reported earlier this year.
Foxconn last week announced a $58.98 million investment in a subsidiary in the Czech Republic, where the company currently makes displays, smartphones and cloud servers and runs design, research and development centres, according to the agency. Taiwan news officer, CNA.