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Big Tech Firms In The Cross Fire Of US-China COVID-19 Clash

With the Trump administration blaming China for the COVID-19 pandemic, and Beijing throwing criticisms back at the US, multinational tech firms have had to adjust their operations.

China is manufacturing base and a significant source of sales for many of the world’s leading tech companies, but recent tensions related to the COVID-19 crisis may see players forced to pull away from the market.

Foxconn, which is a key manufacturer for Apple, is reportedly considering moving more of its operations to India and Vietnam, according to Axios. Foxconn currently has 12 factories in China, more than it has in any other country.

On the production side, if more companies have to spend resources moving operations out of China, it could see companies that have already made this transition benefit. Samsung, for example, has already moved its manufacturing out of China.

In terms of sales, China is a lucrative market. If global companies are cut-off from selling their products there, it could significantly hurt their bottom line. For example, US-based Intel and Qualcomm would be deeply impacted by such a change, given that China is already fostering its own nascent chip processor industry.

Quarterly earnings from Google, Facebook, Apple and Amazon are due this week, which will shed some light on how operations and sales in China have been impacted so far.

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