Pegatron To Invest Up To $1 Billion In Indonesian IPhone Chip Factory

Foxconn plans to invest up to $1 billion to expand a factory in southern India, where the Taiwanese contract manufacturer assembles Apple iPhones, Reuters reported on July 11. Apple wants to move iPhone production out of China, the report said.

In June 2014, the Chinese government released a plan called "Guidelines to Promote National Integrated Circuit Industry Development." A year later, the government announced an investment of 1 trillion RMB, or 161 billion USD, in the domestic semiconductor industry to be developed over the next 10 years.269 The guidelines to improve the semiconductor industry are split into three main strategies: mergers and acquisitions (M&A), market power, and regulation. According to the U.S. International Trade Administration, "the Chinese government appears to be driven by a desire to acquire know-how in all segments of the semiconductor supply chain," resulting in heavy recruitment of foreign talent by the Chinese government.270 China wants to "catch up technologically" with other leading semiconductor firms by 2030 and produce 70% of the chips consumed by the Chinese industry.271

Pegatron to Invest up to $1 Billion in Indonesian iPhone Chip Factory

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Other criticisms include the methods and goals that China has undertaken to develop its semiconductor industry. As of March 2016, China, through its Integrated Circuit (IC) Industry Investment Fund, has invested 43 billion RMB (6.61 billion USD) to expand its semiconductor industry, with much of the money going toward mergers and acquisitions.275 Analysts note that simply acquiring the technology will not help improve China's competitiveness in the long run, but will only increase the profit margin for China temporarily. Intel alone spends four times as much on research and development on its semiconductors as the entire Chinese chip industry.276 2ff7e9595c