On May 23, 2025, a piece of news dropped a "shock bomb" in the field of technology and business According to the Financial Times, Foxconn, Apple's main supplier, announced plans to build a US$1.5 billion (10.8 billion yuan) module factory near Chennai, India, despite opposition from US President Donald Trump, to further expand Apple's supply chain layout in India. This move seems to be a regular operation for enterprises to pursue profits, but in fact, it has stirred up thousands of waves in multiple dimensions such as the development of Apple's industrial chain, the reshaping of the global supply chain, and geopolitics.
Ⅰ Apple's supply chain diversification "strategy"
For a long time, Apple's manufacturing has been highly dependent on China, with more than 90% of its assembly links concentrated here. However, with the clouds of trade friction between China and the United States looming, the tariffs have made the cost of Apple products climb. For example, after the United States imposed a 10% tariff on $200 billion worth of Chinese goods exported to the United States in 2018, the price of Apple products rose in response, and the revenue growth rate in the fourth quarter of that year slowed by 3 percentage points compared with the same period last year. The gradual transfer of production links to India has become a key step for Apple to reduce trade risks and stabilize costs. According to Counterpoint Research, India will contribute 32% of global iPhone production in 2025, compared to only 18% in 2024, a jump of more than 10 percentage points in just one year, demonstrating the speed and intensity of Apple's supply chain relocation. Apple is not simply "fleeing from China", but out of global strategic considerations, aiming to build a more resilient supply chain network to cope with unpredictable trade changes and market fluctuations in the future.
Pictured: Foxconn continues to increase its investment in Apple's foundry in India
Ⅱ Foxconn's strategic "breakthrough"
As Apple's core "partner", Foxconn's move is actually a "breakthrough" for itself. On the one hand, Foxconn is deeply bound to Apple, and more than 50% of its revenue in 2024 will come from Apple orders. Keeping up with the pace of Apple's supply chain relocation can ensure that it continues to obtain large orders from Apple and maintain stable revenue growth. On the other hand, the potential of the "new continent" of India is huge. With a population of 1.4 billion, India has obvious labor cost advantages, and the average monthly manufacturing wage is about 40% lower than that of China. In addition, the Indian government has provided strong policy support, and Tamil Nadu has approved Yuzhan Technology to invest 131.8 billion rupees (about 1.54 billion US dollars) in ESR Oragadam Industrial and Logistics Park, which is also supported by relevant tax breaks and land incentives. Foxconn's layout of display module factories in India can not only meet Apple's needs, but also take this opportunity to develop India's local and surrounding markets, reduce its single dependence on the European and American markets, and enhance its comprehensive competitiveness in the global electronic manufacturing service market.
Ⅲ India's opportunities and "thorns"
Foxconn's $1.5 billion investment is a significant opportunity for India. According to Tamil Nadu officials, the plant is expected to create about 14,000 jobs, covering production, research and development, logistics and other links, which can effectively alleviate the pressure of high employment in India. From an industrial point of view, the export volume of India's electronics industry will reach 90 billion US dollars in 2022, and the entry of Foxconn is expected to make its export volume exceed 120 billion US dollars in 2028, helping India's electronics industry to new heights. However, India also faces a number of challenges. Weak infrastructure is a "hard injury", its power supply stability is poor, more than 20% of the country has a power gap, transportation and logistics efficiency is low, and the port throughput is only 1/3 of similar ports in China, which will greatly affect the production and operation efficiency of Foxconn factories. Indian workers are relatively undisciplined and work efficiency is about 30% lower than that of Chinese workers, and Foxconn needs to spend a lot of energy to reshape its management model. In addition, India's industrial chain is seriously insufficient, and key components rely on imports, increasing production costs and there is a risk of supply disruption.
Ⅳ The "undercurrent" of geopolitics
Trump's opposition to Apple's construction of a factory in India highlights the contradictions between geopolitics and economic cooperation. While the United States is trying to unite India to counterbalance China, it is also worried that the outflow of manufacturing will weaken its own strength. In 2024, the U.S. government will restrict the export of key chip technologies to China on the grounds of "national security" in an attempt to curb China's technological development, but it has also indirectly prompted companies such as Apple to accelerate the relocation of supply chains to India. India, on the other hand, seeks the best interests in the game between China and the United States. The Modi government has used US pressure on China to attract manufacturing relocation, and has also gained momentum through economic cooperation with China. In 2023, the bilateral trade volume between China and India will reach 135 billion US dollars, and India will import a large number of machinery and equipment and chemical products from China for its own industrial development.
Foxconn's investment of 10 billion yuan in India is a landmark event for Apple's supply chain relocation. It not only indicates the reshaping of the global layout of the technology industry, but also reflects the complex geopolitical game. Whether Apple and Foxconn can successfully break through on India's "new battlefield", and whether India can seize the opportunity to get rid of the "industrial dilemma", the story after this "turbulent waves" will continue to write on the map of the technology industry and the global economy.
