Media: Apple will transfer from 15 to 30% of production from China to Southeast Asia

Apparently, the company decided to “insure” and reduce its dependence on Chinese factories.

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Apple asked several prime contractors to assess the impact of moving 15–30% of their production from China to Southeast Asia. The company noted that they are preparing for a “fundamental restructuring of supplies.” This was reported by the Nikkei Asian edition, citing several sources familiar with the situation.

Among the contractors that Apple asked to consider the transfer of production, all the main partners of the company are Foxconn, Pegatron, Wistron, Quanta Computer (manufactured by MacBook), Compal Electronics (manufactured by iPad), Inventec (manufactured by AirPods), Luxshare-ICT and Goertek. Many other Apple suppliers also keep track of which country they are moving production to.

Among countries consider Mexico, India, Vietnam, Indonesia and Malaysia. According to the interlocutors of the publication, the main favorites are India and Vietnam, and the company Wistron has already begun to produce part of iPhones in India.

Sources clarified that as part of this effort, Apple has created a “capital expenditure research team,” which is negotiating with contractors and governments. The material Nikkei notes that the reason for the transfer of production was the US and Chinese trade war, but Apple decided that it became too risky to rely so heavily on Chinese factories and the risks increase even if the conflict is resolved.

Lower birth rates, higher labor costs and the risk of over-centralizing production in one country. These adverse factors will not go anywhere. Regardless of the final 300 billion dollar [sanctions] round, Apple will follow the trend of diversifying production to be more flexible.

one of Apple executives

As of 2019, Apple’s main suppliers are located in China and Taiwan. According to sources, production in new countries can be started not earlier than in a year and a half.

On June 12, Foxconn announced that it would be able to collect all iPhones for the US market outside of China. The company noted that Apple has not yet made such a request, but the manufacturer is ready for it. Apple will probably start collecting iPhones outside of China if the United States raises tariffs on the import of smartphones.

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