Thursday, July 8, 2010

iPhone and "Made in Vietnam"

Since 2007, Foxconn Industry, has been quietly buidling manufacturing facilities in Vietnam to prepare for the inevitable raising inflation and production cost in China.  Foxconn, headquartered in Taiwain,  is the world's largest manufacturing of electronics and computer components.  The founder, Terry Guo is a billionaire and third richest man in Taiwain.  His younger brother actually resides in Cupertino, California.

Foxconn manufactures iPad, iPod, iPhone and electronic products for HP, Dell, Sony, Microsoft, Cisco, Motorola and Nokia. 

With the recent spate of suicide in its Shenzhen factory and China government pressure on its labor practice that forced Foxconn to increase its minimum wage 100% earlier this year,  Foxconn is seriously thinking about relocating to Vietnam.  Even though Vietnam  lacks the skilled workers and a reliable network of suppliers, the lure of a cheaper location is hard to resist.  There have been talks with Vietnamese government to build a cross-border railroad network to Guadong province and its economic hub Shenzhen to bring supplies directly to manufacturing facilities in Vietnam.

The conventional wisdom is that by 2013, it would be common to see iPhone with a "Made in Vietnam" label.

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