iPad production to begin in Vietnam as Apple reduces reliance on China

Posted:
in General Discussion edited January 27
Apple will move a significant portion of its iPad production to Vietnam as part of a continuing effort to diversify its supply chain, a new report claims.

Apple continues effort to reduce reliance on China
Apple continues effort to reduce reliance on China


A report from Nikkei indicates that Apple is planning to shift production of a "significant number" of iPads to Vietnam. One source at Apple supplier Foxconn said that the production shift could start as early as mid-2021, marking the first time that the company has made a major portion of its tablets outside of China's borders.

This is one of several moves showing Apple is serious about moving beyond China. Apple has also ramped up production of the iPhone in India and will soon produce the iPhone 12 there. The report also says Apple will increase production capacity for smart speakers, earphones, and computers throughout Southeast Asia.

One source said that Mac mini production has already been moved to Malaysia. Apple may move parts of its MacBook production to Vietnam later in 2021, and the Nikkei report also highlights Apple's existing footprint in Vietnam aimed at AirPods nd HomePod mini production.

"Apple and many other tech companies all want out-of-China production capacities, and that has not slowed even though the U.S. has a new president," one supply chain manager said. "And they are studying not only peripheral products. Apple, for example, aims to build capacity in new locations -- mostly Southeast Asia nations -- for multiple core products, such as iPhones, iPads, MacBooks, AirPods and others. It was hard to imagine that two years ago, but now, nothing is impossible to shift."

One major issue with Apple's reliance on China was revealed by the coronavirus in 2020. As China shut down, so did many of Apple's supply lanes. Apple's complex supply chain and ability to move things around quickly saved them from major losses, but the pandemic underscored Apple's dependence on the country's manufacturing capabilities. The political landscape also affects Apple's reliance on China, despite hopes that a new presidential administration could ease tensions between China and the U.S.

The report on Wednesday comes about two years after Apple was said to be considering a shift of at least 15% to 30% of its production capacity beyond China. Nikkei's sources suggest that the shift is already underway.

Comments

  • Reply 1 of 9
    LOL. China has had factories in Vietnam for decades. It’s well known they had been moving production there for a long time to circumvent trading restrictions.

    Same thing with China’s aggressive moves into African nations.
    edited January 27 cornchip
  • Reply 2 of 9
    JWSCJWSC Posts: 1,022member
    Good Apple.  Keep going.  You’ve got a lot more you can move out of China.

    Being an authoritarian nation should have consequences.  Although Apple has been publicly silent on Chinese government activities, I’m glad to see them take action.  It’s not only in their business interest, it’s the right thing to do.
    svanstrom
  • Reply 3 of 9
    tmaytmay Posts: 5,465member
    JWSC said:
    Good Apple.  Keep going.  You’ve got a lot more you can move out of China.

    Being an authoritarian nation should have consequences.  Although Apple has been publicly silent on Chinese government activities, I’m glad to see them take action.  It’s not only in their business interest, it’s the right thing to do.
    I came across this;

    https://www.axios.com/scoop-former-google-ceo-and-others-call-for-us-china-tech-bifurcation-46fa8ca1-a677-4257-8b22-5e7fe1b7e442.html

    "What they're saying: "America’s technological leadership is fundamental to its security, prosperity, and democratic way of life. But this vital advantage is now at risk, with China surging to overtake the United States in critical areas," the authors write. 
    • The report "advances policies that position the United States to out-compete China without inviting escalatory cycles of confrontation, retaliation, or unintended conflict."

    The nature of the challenge, according to the report:

    • The competition is "asymmetric," meaning "China plays by a different set of rules that allow it to benefit from corporate espionage, illiberal surveillance, and a blurry line between its public and private sector."

    • We're heading towards somewhat tech spheres. "Some degree of disentangling is both inevitable and preferable," the authors write. "In fact, trends in both countries — and many of the tools at our disposal — inherently and necessarily push toward some degree of bifurcation." That's because the alternative to bifurcation is a world in which China's non-democratic norms have "won."

    • There will be trade-offs, such as between "creating risk-tolerant research environments that encourage innovation versus security/espionage risks."


    Seems that disengagement is under serious consideration. 

    Good.


    watto_cobra
  • Reply 4 of 9
    JWSC said:
    Good Apple.  Keep going.  You’ve got a lot more you can move out of China.

    Being an authoritarian nation should have consequences.  Although Apple has been publicly silent on Chinese government activities, I’m glad to see them take action.  It’s not only in their business interest, it’s the right thing to do.
    That’s not what has happened. Vietnam is just China in a different location.
  • Reply 5 of 9
    JWSC said:
    You’ve got a lot more you can move out of China. Being an authoritarian nation should have consequences. 
    You think Vietnam is a thriving democracy?

    Admittedly, their government is less controlling than China’s. 
    SpamSandwichcornchip
  • Reply 6 of 9
    JWSC said:
    Good Apple.  Keep going.  You’ve got a lot more you can move out of China.

    Being an authoritarian nation should have consequences.  Although Apple has been publicly silent on Chinese government activities, I’m glad to see them take action.  It’s not only in their business interest, it’s the right thing to do.
    That’s not what has happened. Vietnam is just China in a different location.
    With lower wages too

    https://www.statista.com/statistics/744071/manufacturing-labor-costs-per-hour-china-vietnam-mexico/
    SpamSandwich
  • Reply 7 of 9
    mknelson said:
    JWSC said:
    Good Apple.  Keep going.  You’ve got a lot more you can move out of China.

    Being an authoritarian nation should have consequences.  Although Apple has been publicly silent on Chinese government activities, I’m glad to see them take action.  It’s not only in their business interest, it’s the right thing to do.
    That’s not what has happened. Vietnam is just China in a different location.
    With lower wages too

    https://www.statista.com/statistics/744071/manufacturing-labor-costs-per-hour-china-vietnam-mexico/
    Exactly. That’s why they first started moving production.
  • Reply 8 of 9
    JWSCJWSC Posts: 1,022member
    mknelson said:
    JWSC said:
    Good Apple.  Keep going.  You’ve got a lot more you can move out of China.

    Being an authoritarian nation should have consequences.  Although Apple has been publicly silent on Chinese government activities, I’m glad to see them take action.  It’s not only in their business interest, it’s the right thing to do.
    That’s not what has happened. Vietnam is just China in a different location.
    With lower wages too

    https://www.statista.com/statistics/744071/manufacturing-labor-costs-per-hour-china-vietnam-mexico/
    Exactly. That’s why they first started moving production.
    Is it really?  China has all the infrastructure anyone could dream of.  Vietnam doesn’t.  Apple shifting some production there will change that equation over time.  But it’ll be a challenge to establish the logistical framework. Cheaper labor won’t make up for that.  So, I think maybe the reason for moving is a bit more than that.
    svanstrom
  • Reply 9 of 9
    JWSC said:
    mknelson said:
    JWSC said:
    Good Apple.  Keep going.  You’ve got a lot more you can move out of China.

    Being an authoritarian nation should have consequences.  Although Apple has been publicly silent on Chinese government activities, I’m glad to see them take action.  It’s not only in their business interest, it’s the right thing to do.
    That’s not what has happened. Vietnam is just China in a different location.
    With lower wages too

    https://www.statista.com/statistics/744071/manufacturing-labor-costs-per-hour-china-vietnam-mexico/
    Exactly. That’s why they first started moving production.
    Is it really?  China has all the infrastructure anyone could dream of.  Vietnam doesn’t.  Apple shifting some production there will change that equation over time.  But it’ll be a challenge to establish the logistical framework. Cheaper labor won’t make up for that.  So, I think maybe the reason for moving is a bit more than that.
    Rising wages in China and attempts to circumvent trade restrictions were key to China moving production to Vietnam in multiple markets. Wages continue to increase in China, making production there for price sensitive goods prohibitive.
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