Apple is reported to be trying to relocate Apple Watch and Mac production to Vietnam. This is part of a push to make the supply chain of Apple products more diverse, Nikkei Asia reports.
Strict COVID bans in China led to months of supply chain disruptions. Apple is now moving some iPad production out of China and moving it to Vietnam. To protect itself against future shortages and supply disruptions. Apple has also asked several component suppliers to build up their inventories, according to sources cited by Asia Nikkei. Plans to leave China and move its business to Vietnam were previously considered. But due to a sudden increase in the number of COVID-19 cases in Vietnam. A few months later, Apple put the plans on hold.
Apple production in Vietnam
This decision by Apple to exit China reflects the company’s ongoing efforts to diversify its supply chain. It also highlights Vietnam’s growing importance to society and Apple production in Vietnam. Specifically, Apple is asking suppliers outside of the areas affected by the lockdown to help build several months’ supply of components to ensure supply continuity over the next few months. The requirements apply to all of Apple’s product lines — iPhones, iPads, AirPods, and MacBooks — the sources said. Ideally, the company hopes these suppliers can prepare enough additional components to fully offset. The amount is produced in Shanghai and nearby provinces such as Jiangsu, where the risk of supply chain disruption is higher.
“For example, component supplier X has a 40 percent stake in Apple’s business in Jiangsu province. Which is a risk area for supply chain disruption, and supplier Y in another city accounts for the remaining 60 percent.” One of the people with direct knowledge of the matter said, adding. “Apple would like Supplier Y to produce enough additional components to match Supplier X’s 40% share in the coming months. If production in Jiangsu is shut down again.”
Ivan Lam, an analyst at Counterpoint, said he expects it will still take until the second half of June for life to return to normal as the government avoids rushing to get routines back to normal, Asia Nikkei reported. India and Vietnam, which are already Apple manufacturing plants, are among the countries being considered as alternatives to China, the report added.
New Apple device production
The move by Apple, the largest U.S. company by market capitalization, will influence the thinking of other Western companies. They are considering reducing their reliance on China for manufacturing or key materials as a result of Beijing’s indirect support for Russia in its invasion of Ukraine. And lockdowns in some areas to fight against COVID-19. More than 90 percent of new apple device production, including iPhones, iPads, and MacBook laptops, are made in China by outside suppliers, according to analysts. In response to Apple’s supply chain challenges in April. CEO Tim Cook said, “Our supply chain is truly global, so products are made everywhere. We’re continuing to optimize.”
Lockdowns in many cities along Shanghai because of Covid Policies of China have disrupted. The supply chain of many companies including Apple as per Apple News. In April, Apple warned that the resurgence of COVID-19 would hinder sales by up to $8 billion in the current quarter. China’s strict anti-Covid rules have prevented Apple from sending its managers and engineers to the country for the past two years, making it difficult for them to personally inspect production sites. Last year’s power outages also dented China’s reputation for reliability. That’s all for apple production news 2022.