Apple suppliers are in a rush to leave China, says AirPods maker
GoerTek says that it is investing $280 million in a new plant in Vietnam, as US buyers are pressing it -- and all suppliers -- to leave China.
Mumbai, India, is one of the sites US firms are pressing suppliers to move to
In late 2022, GoerTek reportedly lost the contract to manufacture AirPods Pro for Apple. According to Bloomberg, however, it is still producing the regular AirPods, and its deputy chairman says all its customers are pressing for it to move out of China.
"Starting from last month, so many people from the client side are visiting us almost every day," Kazuyoshi Yoshinaga said. "When can you move out? [they ask.]"
Yoshinaga claims that this pressure is coming from US technology firms, and is being directed at all suppliers. "I would say currently 90% of them, they're looking at [moving]," he said. "It's the brand companies' decisions."
As well as firms, including GoerTek, expanding in Vietnam, he says clients are asking about moving operations to India.
"We get requests from our clients almost every month," he said. "'Do you have any plans to expand to India?'"
"If they decide to build up the production lines in India, we may have to think about it seriously," he continued. "Currently we are focusing on developing our Vietnam production facilities."
The pressure to move away from using supply chain companies based in China, comes partly from the need to not be over-reliant on one source. This has intensified in the last year as China's recent extreme COVID measures, and ongoing power supply concerns, have led to factories closing.
Then there is also the trading tension between the US and China.
Apple may never be able to completely withdraw from China, but according to Yoshinaga, suppliers are preparing to move out much faster than expected.
Read on AppleInsider
Mumbai, India, is one of the sites US firms are pressing suppliers to move to
In late 2022, GoerTek reportedly lost the contract to manufacture AirPods Pro for Apple. According to Bloomberg, however, it is still producing the regular AirPods, and its deputy chairman says all its customers are pressing for it to move out of China.
"Starting from last month, so many people from the client side are visiting us almost every day," Kazuyoshi Yoshinaga said. "When can you move out? [they ask.]"
Yoshinaga claims that this pressure is coming from US technology firms, and is being directed at all suppliers. "I would say currently 90% of them, they're looking at [moving]," he said. "It's the brand companies' decisions."
As well as firms, including GoerTek, expanding in Vietnam, he says clients are asking about moving operations to India.
"We get requests from our clients almost every month," he said. "'Do you have any plans to expand to India?'"
"If they decide to build up the production lines in India, we may have to think about it seriously," he continued. "Currently we are focusing on developing our Vietnam production facilities."
The pressure to move away from using supply chain companies based in China, comes partly from the need to not be over-reliant on one source. This has intensified in the last year as China's recent extreme COVID measures, and ongoing power supply concerns, have led to factories closing.
Then there is also the trading tension between the US and China.
Apple may never be able to completely withdraw from China, but according to Yoshinaga, suppliers are preparing to move out much faster than expected.
Read on AppleInsider
Comments
Now we just need to move chip fab away from Taiwan.
This is no joke - we may be at war with China if Xi Jinping gets his way. He's been saber rattling since well before Russia's latest adventure, what with his reunification with Taiwan and China's historical rights to everything touching the South China Sea.
The only 3nm production facilities are currently being built in Taiwan - the US facilities will only be for 5nm (or possibly larger), and don't come online for a while yet.
I and a lot of others having been urging Apple to move global production and the supply chain out of China. Facilities remaining in China should just be for local consumption - but Apple due to greed and/or stubbornness has not only remained, but is expanding production in China. Probably has something to do with the multibillion dollar pact Cook signed with China.
I get why Cook wants to stay in China - the supply chain is there and globalization is how he made his bones at Apple.
But all that's out the door if China attempts to invade Taiwan, commits acts of war on its neighbors, or starts delivering lethal aid to Russia.
Any of the above would probably eventually destroy China's economy, but Apple production would be collateral damage. Near term Apple production depends on both an intact China, Taiwan, and the South China Sea.