As China gets more expensive and US politics less predictable, Foxconn, Pegatron, and others are increasing production in places like India, Vietnam, and Mexico
Debby Wu / Bloomberg :
Context & Ripple Effects
This Bloomberg piece lands three months after sources told Reuters that Foxconn, Pegatron, and other assemblers were weighing a move into Mexico as US-China tensions rose — so it marks the shift from contingency planning to committed capacity in India, Vietnam, and Mexico. The driver is twofold per the report: rising costs inside China and political unpredictability in Washington making single-country assembly untenable.
What makes the story worth tracking is how the later record validates it: by early 2023 Foxconn, Pegatron, Quanta, and Compal were expanding Mexican operations, Apple had moved iPad and MacBook work to Vietnam alongside expanded Indian iPhone output, and the diversification had widened beyond Apple to Google, Microsoft, and Amazon.
First-order effects
- Foxconn and Pegatron immediately split new device assembly across India, Vietnam, and Mexico, reducing the share of any single product line built in China.
- Apple gains non-China production sites for iPhones and, per the later coverage, iPads and MacBooks — directly hedging its exposure to tariffs and export-control risk.
Second-order effects
- Execution costs surface fast: Foxconn's [[a:846787|iPhone 15 build-out in India ran into language barriers, labor disputes, and regulatory hurdles]], while FT-sourced experts flagged India's thinner supplier base and lack of automation as constraints on how much volume can actually move.
- Vietnam and Mexico become competing destinations for the same relocations, forcing those governments to compete on incentives and infrastructure to capture the assemblers' next round of investment.
Third-order effects
- If the pattern holds, consumer-electronics manufacturing consolidates around a multi-hub 'China plus' structure rather than a full exit — with China retaining scale but no longer holding a monopoly on final assembly for US-branded devices.
- The burden shifts upstream: component ecosystems, tooling, and skilled-labor pipelines must replicate outside China for the diversification to be more than final-assembly arbitrage, which is exactly where the expert skepticism about India concentrates.
The trend: Contract electronics manufacturing is dispersing from a China-centered model into a politically hedged multi-country network, with the pace set by US-China tension and each host country's ability to absorb it.