Apple is ramping up the production of iPhones, iPads, Macs and other products outside of China, Nikkei Asia reported, in a sign that the tech giant is continuing to accelerate its production diversification despite hopes that U.S.-China tensions will ease under President Joe Biden.
Sources said iPad production will begin in Vietnam as early as the middle of this year, marking the first time that the world's biggest tablet maker will build a significant number of the devices outside of China. The California tech giant is also stepping up iPhone production in India, its second-largest production base for the iconic device, sources added, with plans to start producing the latest iPhone 12 series -- the company's first 5G smartphones -- there as soon as this quarter.
Apple is also increasing production capacity for smart speakers, earphones and computers in Southeast Asia as part of its ongoing diversification strategy, the sources added. Apple has relocated some 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 set to move a part of its MacBook production to Vietnam this year. Most of its computer production remains in China.
Apple suppliers have been working to meet their client's desire for more diverse production bases. Key supplier Foxconn, formally traded as Hon Hai Precision Industry, injected $270 million to set up 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 ramping up its capacity in northern Vietnam for the HomePod mini to solve supply constraints for the popular device, Nikkei added.
China, which boasts the world's most sophisticated and comprehensive supply chain, remains a key manufacturing hub for major tech companies, but Apple's decision to move such a wide range of products out of the country indicates the tech decoupling of the two countries is likely to continue into 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 that the Trump administration implemented against China in mid-2018 -- a policy that eventually saw tariffs levied on $360 billion worth of Chinese imports.
Source: Nikkei Asian Review | iLounge.com
