TAIWAN-BASED FOXCONN EYES MORE FACTORIES IN MEXICO

Taiwan-based electronics manufacturers Foxconn and Pegatron are among companies eyeing new factories in Mexico, people with direct knowledge of the matter said, as the US-China trade war and coronavirus pandemic prompt firms to reexamine global supply chains.

The plans could usher in billions of dollars in badly needed fresh investments over the next few years for Latin America’s second-largest economy, which is primed for its worst recession since the 1930s Great Depression, Sumeet Chatterjee, Yimou Lee and Anthony Esposito wrote for Reuters late on August 24, 2020.

Foxconn and Pegatron are known as contractors for several phone makers, including Apple. It was not immediately clear which companies they would work with in Mexico. According to two of the sources, Foxconn has plans to use the factory to make Apple iPhones. However, one of the sources said, there had been no sign of Apple’s direct involvement in the plan yet.

Foxconn is likely to make a final decision on a new factory later this year, and work will commence after that, the two people said, adding there was no certainty the company would stick to the plan. Apple spokesman Josh Rosenstock declined to comment. Pegatron is also in early discussions with lenders about an additional facility in Mexico mainly to assemble chips and other electronic components, said the people, who declined to be identified as the talks are confidential. Pegatron declined to comment. Foxconn has five factories in Mexico mainly making televisions and servers. Its possible expansion would underscore a broader and gradual shift of global supply chains away from China amid a Sino-US trade war and the coronavirus crisis. The plans come as the idea of “near-shoring” gains ground in Washington. The Trump administration is exploring financial incentives to encourage firms to move production facilities from Asia to the United States, Latin America and the Caribbean.