Report: Apple tells suppliers it wants to expand manufacturing outside of China, India and Vietnam, likely future production hubs
Apple has apparently advanced its plans to expand manufacturing outside of China, telling its contract manufacturing partners that it aims to diversify production. It is according to a report published today by the Wall Street Journal.
Although some of Apple’s products are already made in countries like Vietnam and India, the vast majority of Apple’s manufacturing takes place in China, at Foxconn and Pegatron facilities.
The Journal says Apple has been considering geographic expansion plans for some time, but the pandemic has put a stop to any immediate changes. However, the recent period of strict confinement in Shanghai has reaffirmed the need to diversify.
China is also geopolitically risky. Its ongoing clashes with the United States over trade are also problematic.
However, it is difficult for any other country to compete as only China is big enough to meet Apple’s huge ordering needs. It is difficult to find qualified and cheap labor elsewhere. The transition to alternative production hubs like India or Vietnam will be slow and gradual. For Apple, this means that the supply chain for new products (like the AR headset) will likely be primarily based outside of China.
Apple production partners like Foxconn have already established facilities in India to help produce iPhones for the domestic market. Further expansion would see iPhones made in India and then exported for global sale.