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Foxconn to shift some output from Shenzhen to Taiwan

Chairman Gou unveils plans to avoid US-China trade war

Foxconn seeks to avoid the impact of the U.S.-China trade war by shifting some production from the mainland to Taiwan.

TAIPEI -- Top iPhone assembler Foxconn, the world's largest contract manufacturer, plans to move some production of high-value-added telecommunications equipment and servers to Taiwan from the Chinese mainland to avoid the U.S.-China trade war, according to Chairman Terry Gou.

Gou's remarks in an interview with Taiwan's CommonWealth Magazine provide further details of relocation plans announced by the chairman in March, as reported by the Nikkei Asian Review.

Foxconn, which trades as Hon Hai Precision Industry, will transfer production equipment from factories in Shenzhen and Tianjin to the southern Taiwanese city of Kaohsiung, Gou told the magazine in the interview published Wednesday.

Given the company's scale, Foxconn's moves have ramifications for cross-border supply chains anchored in China.

His comments come ahead of an anticipated increase in punitive U.S. tariffs on $200 billion of Chinese goods, which would raise the additional duties to 25% from 10% effective Friday. Higher costs for exporting Chinese-made products to the U.S. threaten to drive more production out of the mainland.

Shenzhen is where the Taiwanese group built its first factory on the Chinese mainland, and the city remains a key production base for Foxconn, which has grown into a multinational generating around $170 billion in annual revenue.

But the company "has become unable to manufacture some equipment on the mainland" owing to the U.S.-China trade frictions, Gou told CommonWealth.

The self-made billionaire -- Taiwan's richest person according to Forbes -- has declared a run for the island's presidency, with the election set for January. Gou said he wants to take advantage of the trade war to attract more manufacturing to Taiwan.

Drawn by cheap labor, Foxconn began building up a production base in China in the late 1980s, ahead of Japanese and Western electronics makers.

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