After Apple announced moving some of its iPhone production from China to Vietnam due to market tensions, Foxconn Technology Group is now facing a battle for talent in the Southeast Asian country.
Foxconn’s flagship unit, Hon Hai Precision Industry Co., chairman Young Liu said that Chinese rivals have set up operations near its facilities in Vietnam to poach the company’s employees.
“The move shouldn’t be condoned,” Liu told reporters in Taipei, not mentioning any companies.
Reports reveal that there are now three of Foxconn’s China-based competitors in Vietnam. China’s leading iPad assembler BYD, which is preparing to produce iPads, and Luxshare Precision Industry Co. and GoerTek Inc., which make AirPods, are all setting up shop in the country.
Foxconn earlier expressed that it will increase its headcount in Vietnam “significantly” over the next one to two years. The company currently employs about 60,000 people in Vietnam, which is its largest manufacturing base outside of China.
The move to Vietnam comes as the US-China trade war continues to heat up. During the Trump administration, various measures were implemented, including tariffs on certain products imported from China.
More recently, amid the challenges brought about by the new COVID-19 pandemic in China, Liu said in their company’s annual shareholder meeting that demand for Foxconn’s products in China has suffered as people were forced to stay at home.
This has played a role in Apple’s decision to move production to Vietnam, where the government has been keen to attract foreign investment and has implemented a series of reforms to make the country more business-friendly.
During the pandemic, Vietnam demonstrated resilience, and foreign direct investment (FDI) declined by a measly 2%.
“As border control measures were imposed to limit the COVID-19 contagion, a large number of firms whose production relied on imported intermediate input were suddenly cut off from their supply network, hindering their operations. With its expanding production capacity and relative success in controlling the COVID-19 outbreak, Vietnam is one of the most promising countries for co-location or relocation of production,” said Jade Vichyanond, Economist at AMRO.