Langfang To Be New OEM Headquarters For Foxconn

Vincent Tong, spokesperson of the Taiwan-based original equipment manufacturer Foxconn, has confirmed to the media that to ease the pressure brought by labor cost increases, the company will relocate its major production lines from Shenzhen to Langfang in Hebei.

This is the first time for Foxconn to fully admit that is will move to China's inland on such a large scale.

Tong said that the relocation is expected to be completed before the end of 2010. By then, only some of its capacity will remain in Shenzhen. The relocation may increase depreciation costs and will affect its revenue in the first half of 2010. In addition, due to the decrease of prices of its products, adjustments to production lines, and depreciation expenditure, it will see more losses in 2010 compared with the same period of last year.

For Foxconn's future distribution in mainland China, its department that makes products for Apple and peripheral businesses sectors of its headquarters will reportedly remain in Shenzhen and the number of employees there will be reduced to 100,000; Tianjin will have its all mobile phone production lines; and the company's computer business department will be moved to Chongqing and Wuhan. Moreover, Foxconn has signed an agreement with the municipal government of Zhengzhou to set up a new plant in the city.

At present, Foxconn has production lines in Shenzhen, Langfang, Taiyuan, Tianjin, and Beijing. It also has plants in India, Vietnam, Brazil, Finland, and Mexico.

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