Sources: Foxconn, Pegatron, and others are considering shifting production to Mexico, as US-China tensions rise, with potential plans to make iPhones
HONG KONG/TAIPEI/MEXICO CITY (Reuters) - Taiwan-based electronics manufacturers Foxconn and Pegatron are among companies eyeing new factories in Mexico …
Context & Ripple Effects
This report lands mid-pivot for Apple's assembler base. Foxconn had already been weighing iPhone production in India since early 2019, and by spring 2020 the same factories were running lean — employees said overtime was cut and staff reduced as demand dipped, per the iPhone factory slowdown. Mexico is the next leg of the same geography question.
What makes the timing notable is the driver: US-China tension, not cost alone — though the related Bloomberg coverage frames both, with rising Chinese costs and unpredictable US politics pushing output toward India, Vietnam, and Mexico alike (the November 2020 diversification roundup). The later record validates it: by January 2023 Foxconn, Pegatron, Quanta, and Compal were all planning to grow their Mexican footprint.
First-order effects
- Foxconn and Pegatron would add a tariff-sheltered North American manufacturing option inside the USMCA zone, directly relevant to any Apple products bound for US customers.
- Apple gains a second axis of supply-chain redundancy beyond Asia at a moment when its own iPhone volumes were already being trimmed through reduced factory shifts.
Second-order effects
- Fellow Taiwan ODMs Quanta and Compal — which only later joined the Mexican build-out per the 2023 Nikkei report — face pressure to match Foxconn and Pegatron's footprint rather than cede nearshore assembly work.
- A viable Mexican iPhone line would split Apple's assembly orders three ways alongside India and Vietnam, diluting Zhengzhou-style concentration risk that the 2023 India ramp, catalyzed by the Zhengzhou protests, explicitly targeted.
Third-order effects
- If Mexico matures into real volume — not just pilot lines — the contract-manufacturing industry reorganizes around regional hubs serving each end market, with China remaining a node rather than the center of gravity.
- Apple's supplier scorecards would then price geographic dispersion itself, rewarding assemblers who can quote capacity in China, India, Vietnam, and Mexico simultaneously — a structural bar smaller manufacturers struggle to clear.
The trend: Electronics contract manufacturing is moving from a China-centric model to a China-plus-many one, with Mexico emerging as the Western-hemisphere complement to India and Vietnam.