By Star Chang, posted Jun 30, 2010 at 7:30 AM, 446 views,

Foxconn will continue building iPhones in Shenzhen

After two times of wages increase, and suspension of recruitment, Foxconn is preparing to shift part of its production lines from Shenzhen to north and central part of China. According to China Economic Observer news report, the mobile phone division will move to Tianjin, while the making of personal computers will moved to Chongqing and Wuhan. Interestingly, Foxconn will continue building Apple’s products in Shenzhen…

According to the news report, Foxconn’s withdrawal action is huge, the mobile phone division was asked to complete the move to Tianjin within one month period. The company even plan for an oversea relocation at India and Vietnam. Foxconn will also subsidies an amount of 3,000 yuan (US$440) as financial relief for every Shenzhen’s worker who are willing to shift to other location plants. In the future, Shenzhen’s factory will only specialize on producing Apple’s products, and the labor force will be downsized to about 10 million workers from 40 million.

As for the twice of wages increase, Foxconn has given a big blow to their competitors. Workers from other foundries will now jump ship to Foxconn for better offers, and for those mid-size foundries, they can’t even afford such dramatic rise in costs. It was suspected that Foxconn has planned out for this before the huge relocation to take place.

So we believe Foxconn in Shenzhen, will soon become an Apple only production base, as for other gadget brands, they have to deal with Foxconn relocation plan. It’s true that other locations besides Shenzhen, even outside of Foxconn’s own plant, are cheaper. Local governments from other provinces are offering incentives to attract foreign business. So HP, Dell, Nokia and other company folks, say hello to Tianjin, Chongqing and Wuhan !

Source: The Economic Observer