iPhone maker aims to have 'out of China' production alternatives for key products
Apple plans to move some MacBook production to Vietnam for the first time next year as the U.S. tech group continues diversifying its production base away from China amid escalating tech tensions between Washington and Beijing.
"After the MacBook production shifts, all of Apple's flagship products basically will have one more production location beyond China ... iPhones in India and MacBooks, the Apple Watch and iPads in Vietnam," one person with direct knowledge of the matter told Nikkei Asia. "What Apple wants now is an 'out of China' option for at least part of production for all of its products."
The company has been working on plans to move some MacBook manufacturing to Vietnam for nearly two years, and has set up a test production line in the country, Nikkei Asia reported earlier. Apple makes between 20 million and 24 million MacBooks annually, with production spread between bases in the Chinese cities of Chengdu, in Sichuan province, and Shanghai.
The shift to Vietnam comes amid not only rising geopolitical tensions but also production disruptions caused by China's zero-COVID policies and uncertainty from their sudden loosening in recent weeks.
The MacBook is Apple's last major product still manufactured solely in China, but that is set to change in 2023.
Chiu Shih-fang, a supply chain analyst with the Taiwan Institute of Economic Research, says the changes to the tech supply chain are irreversible. "In the past, most people in the industry always hoped that the situation could ease and things could go back to the good old days," Chiu told Nikkei Asia. "But this time, they realize there is no way of turning back, and no matter what they need to prepare alternatives beyond China."
Apple's diversification to Vietnam started with AirPods, which went into mass production there in 2020. The company also shifted some iPads and Apple Watch production to the Southeast Asian country this year, Nikkei Asia first reported, and in October it announced it had started producing the iPhone 14 in India, only a few weeks after the release of the latest flagship phone.
According to Nikkei Asia, Apple aims to significantly increase iPhone output from India this year and next, with the aim of turning the country into another key production base for the devices. Apple also aims to move some AirPods and Beats earphone production to India.