(JW Insights) Aug 30 -- US tech giant Apple manufacturers aim to move 30% to 50% of their production to somewhere outside of China as US-China relations sour, reported Bloomberg recently, citing a Vietnamese official who has personally toured manufacturers during a trip to China.
China has long been at the heart of Apple’s much-admired supply chain. About 80 percent of the company’s manufacturing partners have a footprint in the country.
But as US-China relations sour, new production sites are changing the way Apple’s devices are made. Parts are corralled from multiple places then assembled in a few locations and shipped to customers everywhere.
India Number of suppliers in India and Vietnam Number of suppliers in Vietnam have emerged as the most popular new hubs in the decade since Apple started publishing its supplier list. Each has strengthening ties with the US and an inexpensive workforce.
In 2012, no Apple-related suppliers operated out of India; now, the country is home to 14. The new iPhone 15 will be the first model to ship directly from India just weeks after it starts leaving factories in China. The country now manufactures roughly 7% of all iPhones, tripling production in the last fiscal year. Overall, Indian electronics exports have quadrupled since 2018 to $24 billion last year, said the Bloomberg report.
Vietnam has seen a fourfold increase in companies assembling Apple products over the past decade. Six of Apple’s top 10 suppliers have factories in Vietnam and/or in India.
The historic shift promises to create millions of jobs beyond China. In Vietnam, the electronics workforce reached 1.3 million in June 2022, a quadrupling since 2013. In India, the sector has created up to a million direct and indirect jobs since 2018, the Indian Cellular and Electronics Association estimate.
Suppliers are certainly reducing their presence in China, with American and Japanese companies such as Dell Technologies Inc., HP Inc. and Sony Group Corp. leading the charge. Even Chinese companies like Luxshare Precision are now building factories outside of their home country.
China remains a key center of operations, though. New Chinese manufacturers joining the supply chain have kept the number of Apple partners in the country almost unchanged since 2012, even as hubs spring up across Asia, according to the Boomberg report.
(Gao J)
