A factory at the mobile phone plant of Rising Stars Mobile India, a unit of Foxconn in Tamil Nadu, India, on July 12, 2019.
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Foxconn Technology will invest more than $1.5 billion in an Indian construction project to fulfill the Apple supplier’s “operational needs” the company announced in Taiwanese security filings Monday.
The $1.541 billion investment was made through a Foxconn subsidiary, Hon Hai Technology India Mega Development, which has been registered in India’s Maharashtra state since 2015, according to one of the securities filings and Indian corporate records. A concurrent filing said that the same subsidiary would budget the equivalent amount in Indian rupees for a construction project to fulfill “operational needs.”
Foxconn is a major Apple supplier and has significant operations in mainland China. Foxconn’s factories are a critical part of Apple’s iPhone manufacturing and were hit hard when Covid-19 lockdowns slowed production to a crawl in 2022.
No further detail was given in the securities filings, and a Foxconn spokesperson did not immediately return CNBC’s request for comment.
The fresh investment from Foxconn comes a few months after Foxconn pulled out of a $19.5 billion chipmaking joint venture in India by “mutual agreement,” the company said at the time. Foxconn added it remained “confident” about India’s semiconductor industry ambitions.
Employees work in a factory at the mobile phone plant of Rising Stars Mobile India Pvt., a unit of Foxconn in Tamil Nadu, India on July 12, 2019.
Bloomberg | Bloomberg | Getty Images
Major Apple supplier Foxconn said on Saturday it was seeking cooperation in India in new areas like chips and electric vehicles after a visit to the country by its chairman, Liu Young-way.
Apple has been shifting production away from China after the country’s strict Covid-19 restrictions disrupted the manufacturing of new-model iPhones and other devices, and amid tensions between Beijing and Washington.
In January, India’s trade minister said Apple, which began iPhone assembly in the country in 2017 through Wistron and later Foxconn, wants India to account for up to 25% of its production from about 5% to 7% currently.
Taiwan’s Foxconn, the world’s largest contract electronics maker and formally called Hon Hai Precision Industry, said Liu had visited India from Feb. 27 to Saturday.
“My trip this week supported Foxconn’s efforts to deepen partnerships, meet old friends and make new ones, and seek cooperation in new areas such as semiconductor development and electric vehicles,” Liu said in a statement.
Foxconn has ambitious plans to make EVs, and is also looking to make chips.
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“On the basis to share, collaborate and thrive together, Foxconn will continue to communicate with local governments to seek the most beneficial development opportunities for the company and all stakeholders,” Liu added.
He did not mention any new concrete investment plans in the country, and Foxconn has not announced any since his trip.
Apple’s iPhones will soon be assembled at another site in the southern Indian state of Karnataka, and 300 acres (120 hectares) have been aside to set up a factory, the state government said on Friday.
Currently, iPhones are assembled in India by at least three of Apple’s global suppliers — Foxconn and Pegatron in Tamil Nadu, and Wistron in Karnataka.
Foxconn, one of Apple’s largest suppliers and a major manufacturer of iPhone components, will invest around $700 million to build a new plant in India’s Karnataka state, Bloomberg reported Friday. The report comes as U.S. companies continue to reevaluate their reliance on China in the wake of mounting tension between the U.S. and the Chinese government.
Bloomberg, citing people familiar with the matter, said Foxconn will build an iPhone parts plant on a 300-acre site near Bengaluru’s Kempegowda International Airport. Bengaluru, also known as Bangalore, is the capital of Karnataka state, which lies on the southwestern coast of India and has one of the highest per-capita GDP levels of any Indian state.
Government officials confirmed Bloomberg’s reporting on Friday, writing that the new plant would create 100,000 jobs. The effort will be one of the largest investments by Foxconn in India, Bloomberg reported.
Bengaluru in particular is considered one of the leading engineering and technology hubs in India.
Foxconn and technology suppliers more broadly have looked to diversify beyond China, which has been a traditional hub for manufacturing, in the wake of devastating Covid lockdowns and manufacturing slowdowns. Those lockdowns prompted widespread national dissent, and videos of Foxconn employees fleeing the company’s iPhone manufacturing facility spread widely on Western social media.
India and Vietnam have emerged as top contenders to supplant China’s dominance in the manufacturing and supply space. CNBC has previously reported on comments from Indian government officials which claimed that Apple sought to ramp up production in India to account for 25% of their total output. Foxconn already maintains a presence in India through a Chennai-proximate factory in eastern India.
“Chinese companies are getting pretty competitive for iPhone assemblers. China is doing quite well in pretty much everything, except semiconductors,” Kirk Yang, chairman and CEO of Kirkland Capital, told CNBC’s “Squawk Box Asia” Friday.
CFOTO | Future Publishing | Getty Images
More mainland Chinese electronics manufacturing companies are set to take away market share from Taiwanese counterparts such as Foxconn and Pegatron, an investment fund manager said.
“Chinese companies are getting pretty competitive for iPhone assemblers. China is doing quite well in pretty much everything, except semiconductors,” Kirk Yang, chairman and CEO of Kirkland Capital, told CNBC’s “Squawk Box Asia” Friday.
“So that’s why eventually, you are going to see more and more Chinese companies taking market share away from Taiwanese electronic companies,” Yang added.
Luxshare has been producing a small quantity of the iPhone 14 Pro Max model at its Kunshan plant, the Financial Times reported, as Foxconn’s Zhengzhou factory faced Covid restrictions and labor unrest last year.
Founded in 2004 by a former Foxconn worker, Luxshare makes connector cables for the iPhone and MacBook, and also manufactures AirPods.
Yang added that with China-Taiwan geopolitical tensions, Taiwanese companies on the mainland have seen a lot of pressure in the last five years. “A lot of them are moving out of China,” Yang said.
That’s why Apple has to diversify, he said, adding that the U.S.-China tech war is also prompting companies to move even faster out of mainland China.
Furthermore, Chinese companies such as Luxshare have the Hong Kong advantage, Yang said.
“They can probably hire people [more easily than non-Chinese companies] and get better tax incentives. After local companies learn how to make products in a similar quality, at a cheaper price, they will be taking market share.”
Taiwan’s government said on Saturday it would fine Foxconn, the world’s largest contract electronics maker, for an unauthorized investment in a Chinese chip maker even after the Taiwanese firm said it would be selling the stake.
Qilai Shen | Corbis Historical | Getty Images
Taiwan’s government said on Saturday it would fine Foxconn, the world’s largest contract electronics maker, for an unauthorized investment in a Chinese chip maker even after the Taiwanese firm said it would be selling the stake.
Taiwan has turned a wary eye on China’s ambition to boost its semiconductor industry and is tightening legislation to prevent what it says is China stealing its chip technology.
Foxconn, a major Apple Inc supplier and iPhone maker, disclosed in July it was a shareholder of embattled Chinese chip conglomerate Tsinghua Unigroup.
Late Friday, Foxconn said in a filing to the Taipei stock exchange its subsidiary in China had agreed to sell its entire equity stake in Tsinghua Unigroup.
Taiwan’s Economy Ministry said in response that its investment commission, which has to approve all foreign investments, will ask Foxconn on Monday for a “complete explanation” about the investment.
“As for the fact that the investment was not declared beforehand, the amount will still be calculated in accordance with the formula and the penalty will be imposed in accordance with the law,” it said, without giving details.
Foxconn did not immediately respond to a request for comment.
People familiar with the matter have previously told Reuters that Foxconn did not seek approval from the Taiwan government before the investment was made and authorities believe it violated a law governing self-ruled Taiwan’s relations with China, which claims the island as its own.
In a statement on Saturday before the economy ministry’s, Foxconn said as the year-end approached the original investment had “remained unfinalized.”
Foxconn said that Xingwei, 99% controlled by its China-listed unit Foxconn Industrial Internet Co Ltd (FII), had agreed to sell its holdings for at least 5.38 billion yuan ($772 million) to a Chinese company called Yantai Haixiu.
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Xingwei controls a 48.9% stake in a different entity that holds a 20% stake in the vehicle owning all of Unigroup.
“In order to avoid uncertainties from further delays or impact to investment planning and the flexible deployment of capital, the Xingwei Fund will transfer its entire holding in Shengyue Guangzhou to Yantai Haixiu,” it said.
“After the transfer is completed, FII will no longer indirectly hold any equity in Tsinghua Unigroup.”
Tsinghua Unigroup did not respond to a request for comment.
Taiwanese law states the government can prohibit investment in China “based on the consideration of national security and industry development.” Violators of the law could be fined repeatedly until corrections are made.
Foxconn, formally called Hon Hai Precision Industry Co Ltd, is keen to make auto chips in particular as it expands into the electric vehicle market.
The company has been seeking to acquire chip plants globally as a worldwide chip shortage rattles producers of goods from cars to electronics.
Taipei prohibits companies from building their most advanced foundries in China to ensure they do not site their best technology offshore.
The southern Chinese manufacturing hub of Guangzhou is the latest to see lockdowns amid a surge in COVID-19 cases, as the government presses ahead with the strict zero-COVID policy that has frustrated citizens.
The latest lockdowns have further disrupted global supply chains and sharply slowed growth in the world’s second-largest economy, as the Associated Press reported.
Residents in districts encompassing almost 5 million people have been ordered to stay home at least through Sunday, with one member of each family allowed out once a day to purchase necessities, local authorities said Wednesday.
The order came after the densely populated city of 13 million reported more than 2,500 new cases over the previous 24 hours.
China has retained its strict zero-COVID policy despite relatively low case numbers and no new deaths. The country’s borders remain largely closed, and internal travel and trade is complicated by ever-changing quarantine regulations.
Apple AAPL, -3.32%
and iPhone manufacturer Foxconn 2317, -1.95%
said over the weekend that restrictions are crimping production and will delay shipments of the high-end iPhone 14.
In the U.S., known cases of COVID are climbing again for the first time in a few months. The daily average for new cases stood at 39,578 on Tuesday, according to a New York Times tracker, up 5% versus two weeks ago.
As always, the increase in cases is not uniform across the nation. Some states are seeing sharp spikes, led by Nevada, where cases are up 96% from two weeks ago. Tennessee is second with cases up 69%, followed by Louisiana with cases up 68%, New Mexico, where they are up 62%, and Utah, where they have climbed 61%.
Cases are up by a double-digit percentage in 22 states.
The daily average for hospitalizations was up 3% to 27,713, while the daily average for deaths was down 14% to 308.
• Novavax Inc. NVAX, -5.19%
on Tuesday tweaked its full-year sales outlook to the low end of its expected range and reported a surprise quarterly loss, but sales for the COVID-19 vaccine maker were far better than expected. The company reported a net loss of $168.6 million, or $2.15 a share, compared with a loss of $322.4 million, or $4.31 a share, in the same quarter a year ago. Sales were $735 million, compared with $178.8 million in the prior-year quarter. Analysts polled by FactSet expected Novavax to earn $1.57 a share on revenue of $586 million.
• A Food and Drug Administration advisory committee said this week that Veru Inc.’s VERU, +3.95%
COVID treatment Sabizabulin demonstrated a clear clinical benefit with a favorable benefit-to-risk profile. Veru is seeking emergency-use authorization for treatment of hospitalized COVID-19 patients at high risk for acute respiratory distress syndrome.
• A Massachusetts man who admitted to lying on his application for federal coronavirus business stimulus funds and using some of the $400,000 he received to pay his mortgage has been sentenced to 15 months in prison, federal prosecutors said, as the AP reported. In addition to the time behind bars, Adley Bernadin, 44, of Stoughton, was sentenced last week to three years of supervised release and ordered to forfeit more than $280,000, according to a statement from the U.S. attorney’s office.
The U.S. leads the world with 97.8 million cases and 1,072,943 fatalities.
The Centers for Disease Control and Prevention’s tracker shows that 227.3 million people living in the U.S., equal to 68.5% of the total population, are fully vaccinated, meaning they have had their primary shots.
So far, just 26.3 million Americans have had the updated COVID booster that targets the original virus and the omicron variants, equal to 8.4% of the overall population.
China’s strict zero-COVID policy was making headlines Monday after Apple and iPhone manufacturer Foxconn said over the weekend that restrictions are crimping production and will delay shipments of the high-end iPhone 14.
“We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models,” Apple AAPL, -0.82% announced in a Sunday evening press release. “However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products.”
Foxconn, meanwhile, which trades as Hon Hai Precision Industry Co. 2317, -0.50%,
lowered its fourth-quarter guidance and said anti-COVID measures were affecting some of its operations in Zhengzhou, China, as Dow Jones Newswires reported.
Foxconn said that the Henan provincial government had made it clear that it would fully support the company. Foxconn’s most advanced iPhone plant, located in the provincial capital of Zhengzhou, has been battling a COVID outbreak.
Foxconn said it is working with the government to halt the outbreak and resume production at full capacity as quickly as possible.
Workers at the world’s biggest assembly site for Apple’s iPhones walked out last week as Foxconn struggled to contain a COVID-19 outbreak. The chaos highlighted the tension between Beijing’s rigid pandemic controls and the need to keep production on track. Photo: Hangpai Xinyang/Associated Press
Investors have been closely watching China for signs that its government would start to lift the tough pandemic restrictions that have been in place for almost three years. The Wall Street Journal reported Monday that the country’s leaders are considering steps but have not yet set a timeline.
Chinese officials have become concerned about the costs of their zero-tolerance approach to COVID, which has resulted in lockdowns of cities and whole provinces, crushing business activity and confining hundreds of millions of people to their homes for weeks and sometimes months on end.
But they are weighing those concerns against the potential costs of reopening on public health and on support for the Communist Party. On Saturday, officials from China’s National Health Commission again reaffirmed their commitment to a firm zero-COVID strategy, which they described as essential to “protect people’s lives.”
Still, there are plans in Beijing to further cut the number of days incoming travelers must quarantine in hotels from 10 to seven, followed by three days of home monitoring, the paper reported, citing people involved in the discussions.
And officials have told retail businesses that they intend to reduce the frequency of PCR testing as soon as this month, partly because of the cost.
In the U.S., known cases of COVID and hospitalizations are climbing again for the first time in a few months.
The daily average for new cases stood at 39,954 on Sunday, according to a New York Times tracker, up 6% compared with two weeks ago. But cases are sharply higher in several states, led by Nevada, where they are up 96% from two weeks ago, followed by Tennessee, where they are up 69%; Louisiana, where they are up 68%; Utah, where they have climbed 61%; and New Mexico, where they are up 56%.
Cases are climbing in 30 states and in Washington, D.C.
The daily average for hospitalizations was up 2% to 27,419, while the daily average for deaths was down 11% to 320.
Physicians are reporting high numbers of respiratory illnesses like RSV and the flu earlier than the typical winter peak. WSJ’s Brianna Abbott explains what the early surge means for the winter months. Photo illustration: Kaitlyn Wang
The two variants accounted for 52.3% of all cases in the New York region, which includes New Jersey, Puerto Rico and the Virgin Islands, up from 42.5% the previous week. That was more than the BA.5 omicron subvariant, which accounted for 24.9% of new cases in the New York area in the latest week.
The BA.5 omicron subvariant accounted for 39.2% of all U.S. cases, the data show.
BQ.1 and BQ.1.1 were still lumped in with BA.5 variant data as recently as three weeks ago, because at that time, their numbers were too small to break out. BQ.1 was first identified by researchers in early September and has been found in the U.K. and Germany, among other places.
• BioNTEch SE BNTX, +2.84%,
the German biotech that has partnered with Pfizer PFE, -0.53%
on a COVID vaccine, posted earnings early Monday, showing a roughly 50% drop in profit that sent its stock lower, despite beating consensus estimates. The Mainz-based company said it had invoiced about 300 million doses of its bivalent vaccine, which targets the omicron variant as well as the original virus. The company chalked up €564.5 million ($563.9 million) in direct COVID vaccine sales in the quarter, down from €1.351 billion a year ago. BioNTech raised the lower end of its full-year COVID vaccine revenue range to €16 billion to €17 billion, from a previous €13 billion to €17 billion.
• Thousands of runners took to the streets of the Chinese capital on Sunday for the return of Beijing’s annual marathon after a two-year hiatus, the Associated Press reported. However, the good news was offset by anger about another death related to COVID restrictions, this time of a 55-year-old woman in a sealed building. An investigation report released Sunday in Hohhot, the capital of China’s Inner Mongolia region, blamed property management and community staff for not acting quickly enough to prevent the death of the woman after being told she had suicidal tendencies.
• The U.S. flu season is off to an unusually fast start, contributing to an autumn mix of viruses that have patients filling hospitals’ and physicians’ waiting rooms, the AP reported separately. Reports of flu are already high in 17 states, and the hospitalization rate hasn’t been this high this early since the 2009 swine flu pandemic, according to the Centers for Disease Control and Prevention. So far, there have been an estimated 730 flu deaths, including at least two children. The winter flu season usually ramps up in December or January.
The U.S. leads the world with 97.7 million cases and 1,072,598 fatalities.
The Centers for Disease Control and Prevention’s tracker shows that 227.3 million people living in the U.S., equal to 68.5% of the total population, are fully vaccinated, meaning they have had their primary shots.
So far, just 26.3 million Americans have had the updated COVID booster that targets the original virus and the omicron variants, equal to 8.4% of the overall population.
Hospitalizations are rising again in New York City with the spread of new COVID-19 subvariants that are better at evading immunity. Cases of flu and respiratory syncytial virus, or RSV, are also increasing.
State data show about 1,100 patients hospitalized with COVID as of Oct. 24, up from 750 in mid-September, as the New York Times reported. Case numbers have held steady, although with many people testing at home where data are not being collected, those numbers are not reliable.
Data from the Centers for Disease Control and Prevention show that the omicron sublineages named BQ.1 and BQ.1.1 accounted for 42.5% of all cases in the New York region in the week through Oct. 29, up from 37% the previous week.
That was more than the BA.5 omicron subvariant, which accounted for 35.7% of new cases in the New York region in the latest week. The two sublineages were not even registering as recently as three weeks ago, demonstrating just how fast they are spreading.
Experts are also concerned about a nationwide surge in RSV, which can cause breathing difficulties in small children and older adults and for which there is currently no vaccine.
There was good news from Pfizer Inc., however, which said Tuesday that data from a late-stage trial of an RSV vaccine had proved effective in preventing severe illness in children up to 6 months old.
The Phase 3 trial found that the vaccine, given to pregnant mothers, achieved vaccine efficacy of 81.8% in infants from birth through the first 90 days of life. The trial found efficacy of 69.4% through the first 6 months of life.
Pfizer PFE, +3.14%
said it expects to make its first U.S. regulatory application for the vaccine by the end of 2022 and to follow on with other regulatory bodies. It will also submit the results of the trial for peer review in a scientific journal.
The daily U.S. average for new COVID cases stood at 37,665 on Monday, according to a New York Times tracker, which was flat as compared with two weeks ago. The daily average for hospitalizations was up 2% to 27,184, while the daily average for deaths was down 3% to 348.
Workers at the world’s biggest assembly site for Apple’s iPhones walked out as Foxconn has struggled to contain a COVID-19 outbreak. The chaos highlights the tension between Beijing’s rigid pandemic controls and the urge to keep production on track. Photo: Hangpai Xinyang/Associated Press
• The Wall Street Journal reported Tuesday that Hong Kong stocks appeared to be rallying after an anonymous post on Chinese social media suggested that the government may intend to soften pandemic-related restrictions beginning in March. Other outlets also reported on the rumor. American depositary receipts for Chinese companies surged on the news.
• Pfizer’s COVID antiviral Paxlovid brought in $7.5 billion in sales in the third quarter of the year, compared with a FactSet consensus of $7.6 billion. The drug company also reiterated guidance for Paxlovid revenues in 2022, saying it still expects $22 billion in sales for the year. The FactSet consensus is $22.5 billion. Pfizer raised its full-year revenue guidance for the company’s Comirnaty COVID vaccine by $2 billion to $34 billion. The guidance includes doses expected to be delivered in fiscal 2022, primarily under contracts signed as of mid-October.
AZN, +0.90%
COVID vaccine Vaxzevria has been granted full marketing authorization in the European Union, Dow Jones Newswires reported. The Anglo-Swedish pharmaceutical giant said Vaxzevria has been shown to be effective against all forms of the virus. Vaxzevria was originally granted conditional marketing authorization due to the urgency of the COVID-19 pandemic, it said.
The U.S. leads the world with 97.5 million cases and 1,070,429 fatalities.
The Centers for Disease Control and Prevention’s tracker shows that 226.9 million people living in the U.S., equal to 68.4% of the total population, are fully vaccinated, meaning they have had their primary shots.
So far, just 22.8 million Americans have had the updated COVID booster that targets the original virus and the omicron variants, equal to 7.3% of the overall population.
