TAIPEI – Apple is ramping up production of iPhones, iPads, Macs and other products outside of China, Nikkei Asia has learned, as a sign that the tech giant continues to accelerate its production diversification, despite hopes that tensions between the US and China will ease. under President Joe Biden.
Sources said iPad production will begin in Vietnam as early as mid-year, marking the first time that the world’s largest tablet manufacturer will build a significant number of the devices outside of China. The California tech giant is also ramping up iPhone production in India, the second-largest manufacturing base for the iconic device, sources added, with plans to take the latest iPhone 12 series – the company’s first 5G smartphones – there. produce as soon as this quarter.
Apple is also increasing manufacturing capacity for smart speakers, earphones and computers in Southeast Asia as part of its ongoing diversification strategy, the sources added.
In Vietnam, Apple is mobilizing suppliers to expand production capacity for the latest HomePod mini, the affordable version of its voice-activated smart speaker range. The device has been produced in Vietnam since its introduction last year. The Cupertino-based tech giant has already increased local production of its audio-related products, including its various AirPods lineups, sources said.
Apple has moved some of the production of the Mac mini, one of its desktop computers, to Malaysia, another person familiar with the matter told Nikkei, and the company is also planning some of its MacBook production this year. to move to Vietnam. Most of its computer production remains in China.
“Apple and many other tech companies all want production capacity outside of China, and that hasn’t slowed down, even though the US has a new president,” said a supply chain manager. And they’re not just studying peripheral products. For example, Apple wants to build capacity in new locations – mostly in Southeast Asian countries – 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. ‘
Apple suppliers have worked to fulfill their customers’ desire for more diverse production bases. Major supplier Foxconn, formally traded as Hon Hai Precision Industry, injected $ 270 million late last year to set up a subsidiary in Vietnam as part of the Taiwanese company’s efforts to expand its manufacturing capacity in the country. Luxshare Precision Industry, a new iPhone assembler that is also a major supplier of AirPods, is expanding its capacity in North Vietnam for the HomePod mini to resolve delivery constraints for the popular device, Nikkei discovered.
Apple’s moves are part of a larger trend of global technology giants reducing their manufacturing dependence on China, long known as the world’s factory. The country’s rising labor costs, ongoing trade tensions between Washington and Beijing, and the outbreak of the coronavirus pandemic that seriously disrupted the supply chain have all reduced the risks of over-reliance on one country. The US government has also launched a campaign to restructure the supply chain and has urged technology suppliers to move out of China, the Nikkei previously reported.
China, which boasts the world’s most advanced and comprehensive supply chain, remains a major manufacturing hub for major technology companies, but Apple’s decision to move such a wide range of products out of the country indicates that the technical disconnection of the two countries will likely continue. in 2021.
And while there is some hope that the political climate will improve under the new US president, Biden has said he will not immediately reverse the tariff policy that the Trump administration introduced against China in mid-2018 – a policy that eventually led to tariffs that were levied. $ 360 billion in Chinese imports.
China’s Goertek, a major Apple AirPods assembler, asked all of its suppliers to evaluate the feasibility of moving production to Vietnam as early as in late 2018, and was the first Apple supplier to confirm a plan to shift production. In 2019, Apple asked multiple suppliers to study the cost implications of moving about 15% to 30% of production from China for a wide variety of product lines. The AirPods series, which ships approximately 90 million units per year, first went into production in Vietnam in the summer of 2019, with mass production in 2020. Part of the production of AirPods Pro, AirPods Max and the HomePod mini was also assigned. to Vietnam last year. Apple started making the iPhone 11 in India in 2020.
Apple did not respond to Nikkei’s request for comment.