TAIPEI – Apple has increased production of iPhones, iPads, Macs and other products outside of China, according to Nikkei Asia, signaling that the technology giant continues to accelerate its diversification of production despite the hope that tensions between the US and China shrink under President Joe Biden.
According to sources, iPad production will begin in Vietnam as early as mid-this year, marking the first time the world’s largest tablet maker will build a significant number of devices outside of China. California tech giant is also increasing iPhone production in India, its second largest production base for the flagship device, sources added, with plans to begin production of the latest iPhone 12 series. the company’s first 5G smartphones, there as early as this quarter.
Apple is also increasing the production capacity of speakers, headphones and smart computers in Southeast Asia as part of its ongoing diversification strategy, the sources added.
In Vietnam, Apple is mobilizing suppliers to expand the production capacity of the latest HomePod mini, the affordable version of its range of voice-activated smart speakers. The device has been produced in Vietnam since it was introduced last year. The Cupertino-based technology giant has already increased local production of its audio-related products, including its various AirPods lines, sources said.
Apple has moved some production from the Mac mini, one of its desktop computers, to Malaysia, Nikkei told another person familiar with the matter, and the company will also have to move some of its MacBook production to Vietnam. this year. Most of its computer production remains in China.
“Apple and many other tech companies want production capabilities outside of China, and that hasn’t slowed down even though the U.S. has a new president,” a supply chain manager said. “And they don’t just study peripheral products. Apple, for example, aims to increase capacity in new locations, mostly Southeast Asian countries, for a variety of commodities, such as iPhones, iPads, MacBooks, AirPods and others. It was hard to imagine two years ago, but now nothing is impossible to change. “
Apple suppliers have been working to satisfy their customers ’desire to get more diverse production bases. Key supplier Foxconn, formally marketed as Hon Hai Precision Industry, injected $ 270 million to establish a subsidiary in Vietnam late last year as part of the Taiwanese company’s efforts to expand its production capacity in the country. Luxshare Precision Industry, a new iPhone assembler that is also a key supplier of AirPods, is increasing its capacity in northern Vietnam for the HomePod mini to address the supply limitations of the popular device, Nikkei learned.
Apple’s moves are part of a larger trend of global technology giants reducing their reliance on production from China, long known as the world’s factory. Rising labor costs in the country, prolonged trade tensions between Washington and Beijing and the outbreak of the coronavirus pandemic that severely disrupted the supply chain have led to the risk of becoming too dependent on one country. The U.S. government has also launched a “supply chain restructuring” campaign and urged technology providers to move away from China, the Nikkei previously reported.
China, which has the most sophisticated and complete supply chain in the world, remains a key manufacturing hub for major technology companies, but Apple’s decision to move such a wide range of products abroad indicates that the technological decoupling of the two countries is likely to continue. until 2021.
And while there are some hopes that the political climate will improve under the new U.S. president, Biden has said he will not immediately reverse the tariff policy the Trump administration pursued against China in mid-2018, a policy that ultimately imposed tariffs. Chinese imports worth $ 360 billion.
Chinese Goertek, a key assembler of Apple’s AirPods, asked all of its suppliers to evaluate the feasibility of moving production to Vietnam as early as the end of 2018 and was the first Apple supplier to confirm a plan to change production. In 2019, Apple asked several vendors to study the cost implications of moving 15% to 30% of production out of China for a wide range of product lines. Its AirPods series, which ships around 90 million units a year, went into production for the first time in Vietnam in the summer of 2019, with series production after 2020. They were also assigned a part of the production of AirPods Pro, AirPods Max and HomePod mini in Vietnam last year. Apple began manufacturing the iPhone 11 in India in 2020.
Apple did not respond to Nikkei’s request for comment.