Apple pushes production outside China

Apple wants to have its iPhone, iPad and other devices increasingly manufactured outside of China in the future in order to further reduce its dependence on the country. It confirmed to suppliers that it plans to push production in India and Southeast Asia.

Apple is increasingly shifting production

Apple has told some suppliers that it plans to push production outside of China. That’s according to the Wall Street Journal, citing internal company sources. One of the main reasons, they said, is the country’s strict anti-COVID policies, which are causing significant supply bottlenecks at Apple and many other companies due to the lockdowns that have been imposed.

More than 90 percent of all Apple products, such as iPhones, iPads and MacBooks, are manufactured in China by suppliers. Small quantities are already being manufactured in India and the Southeast Asian region (primarily Vietnam), for example. Here, production is to be significantly stepped up as a result.

A move away from Apple, after all the largest company in the U.S. with a stock market value of more than $3 trillion, could make enormous waves in the Western world, the Wall Street Journal predicts. Many more companies could turn away from China and move their production.

Apple was already looking to shift production before COVID-19

As early as 2019, before the COVID-19 pandemic broke out, Apple had planned to shut down production in China, according to the report. But the pandemic would have brought the plans to a halt at the time.

Now the company is apparently making a new attempt and has already informed suppliers that it will build new factories for mass production outside of China. However, the first step is to find markets that offer a similarly large pool of qualified and inexpensive workers. India, in particular, comes into question here.

Meanwhile, Chinese Premier Li Keqiang reiterated last week that Beijing wants to be a hot spot for foreign investors and work closely with foreign companies. One advantage of producing Apple products in China is the short delivery routes. After all, the country accounts for about one-fifth of all Apple’s global sales.

Focus on Vietnam

In the future, the company plans to further expand production in India and Vietnam, he said. As reported by Saigon Online, Apple CEO personally thanked Vietnamese Prime Minister Pham Minh Chinh during his U.S. trip in mid-May for creating fair, transparent and market-serving workplaces, reiterating Apple’s desire to further expand supply chains in the country.

The report shows that 31 companies in Vietnam, with a total of 160,000 workers, manufacture and assemble electronic parts and accessories for various Apple products. In the future, the number is expected to increase significantly.