Reuters reported today, Monday, citing informed sources, that the two Taiwanese electronics makers, Foxconn and Pegatron, are among the companies looking to establish new factories in Mexico, as it pushes the trade war between the United States and China, in addition to an epidemic. Coronavirus companies have to search again in global supply chains.
The agency said: The plans could generate billions of dollars in new investment. Mexico desperately needs it over the next few years for the second largest economy in Latin America, which is bracing for its worst recession since the Great Depression of the 1930s.
Foxconn and Pegatron are known to be among the leading companies that make Apple’s smartphones. According to two Reuters sources, Foxconn has plans to use its factory in Mexico to make iPhones for Apple. However, one of the sources said: There is no sign of Apple’s direct participation in the plan yet.
The two sources said: It is likely that Foxconn will make a final decision on a new plant later this year, and then work will begin after that, and they added that there is no certainty that the company will stick to the plan.
Reuters sources said – who requested anonymity because the talks are confidential: Pegatron is also in early discussions with lenders about an additional facility in Mexico that will be used mainly to collect chips and other electronic components.
Foxconn already has five factories in Mexico that mainly manufacture televisions and servers. Its potential expansion would underline a broader and gradual shift in global supply chains away from China amid the Sino-U.S. Trade war and the coronavirus crisis.
The plans come at a time when the idea of moving the business to a nearby country, instead of to a further country, is acquired. Floor in Washington. The Trump administration is considering financial incentives to encourage companies to move production facilities from Asia to the United States and Latin America and the Caribbean.
To strike a new deal with the free trade zone in the world’s largest consumer market, Mexico also has geography, low wages and time zones in its favor. Even with the global recession and concerns about the business climate under President (Andres Manuel Lopez Obrador), government data shows that foreign investment is still largely intact so far this year.