Apple said to expand production in India and Southeast Asia
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Apple said to expand production in India and Southeast Asia
More of Apple's products could be manufactured outside of China in the future.
The Wall Street Journal reports Apple has informed contract manufacturers to expand production outside China, especially to India and Southeast Asia. While Apple has been considering diversifying its supply chain partners for some time, the recent chain of global events led Apple to reaffirm its plans.
China's strict Covid-19 policy, which led to numerous lockdowns across the country, and trade tensions with the American government are cited as two of the many reasons. The lockdowns have affected production of Apple's iPhones, iPads and Macs, resulting in extended delivery times and loss of revenue.
Apple and its contract manufacturers have been trying to shift production out of China in recent years. Nikkei Asian Review reported in June 2019 that Apple planned to shift between 15 to 30% of its production capacity out of China to Mexico, India, Vietnam, Indonesia and Malaysia. The publication also claimed Apple started trial production of the AirPods in Vietnam in the same year.
Pegatron signed a letter of intent with the Indonesian government in 2019 to invest up to 1 billion in an Indonesian factory to assemble "chips for Apple smartphones". Pegatron also started assembling iPad and MacBook devices in Indonesia from June 2019 according to a DigiTimes report.
Foxconn announced in the same year that it was ready to manufacture iPhones in India. In 2020, Foxconn invested $1 billion in India to expand iPhone production in India. Towards the end of 2020, Foxconn reportedley shifted some iPad and MacBook production from China to Vietnam. Economic Times said in a May 2020 report that Apple was exploring the possibility of shifting almost 20% of its iPhone production capacity from China to India.
Despite these plans, China remains the only country in the world with the capability and labour force to meet Apple's huge orders. The Covid-19 pandemic also disrupted suppliers in Vietnam last year, which led to longer delivery times for the iPhone 13.
Source: Wall Street Journal via 9to5Mac
