For as long as we can remember, Apple has been relying on China for the manufacturing of their products. Ranging from iPhone to MacBook and iPad, everything has been manufacturing and being assembled in China. Apple even struggled with the shortage of iPads and MacBooks during the pandemic lockdown because trade and shipping to and from China were restricted.
So, Apple has requested (or ordered, we don’t know) Foxconn to shift the specific MacBook and iPad manufacturing to Vietnam. The assembly lines are already being set up in the area and the production is highly likely to start in the first half of 2021. The production will initiate at Bac Giang provide. The information was actually shared through the Reuters report.
The prime reason behind this manufacturing unit shift is that Apple wants to diversify the supply chain. This can be accredited to the plethora of enduring trade disputes. Yes, we are talking about the trade disputes caused by President Trump and are still going strong between China and the US. As far as the models are concerned, there is no such information available.
That’s to say because Apple hasn’t shared which Mac and iPad models will be manufactured in Vietnam. In addition, they haven’t shared the proportion of total production will be shifted out of China. However, this is not the first time that Apple has chosen Vietnam for product manufacturing because they started manufacturing AirPods Pro in Vietnam this year.
In addition, Apple has been using India for the manufacturing of some iPhone models but it tends to predate the trade war rolling between the US and China. With this being said, Apple was better able to meet the import regulations set by the local government. Also, when it concerns Apple, there are huge bucks included.
With this being said, Apple is planning to invest around $270 million for the expansion of manufacturing unit in Vietnam. The investment will be made through Foxconn. According to the Taiwanese company, they are likely to shift approximately 30% of the manufacturing line outside China. Previously, Apple has been manufacturing the AirPods Pro and AirPods in Vietnam.
Consequently, Apple has now asked Foxconn to expand manufacturing in Vietnam. The change is highly likely to occur in the first half of 2021 but there is no specific date shared by the companies. According to the reports, Apple wants to reduce its dependence on China when it comes down to manufacturing and we’ve already seen that Apple is pretty dependent on China during the lockdown.
This is because when shipping was restricted with China during the coronavirus, Apple struggled with the shortage of products. So, to some extent, it’s a positive thing that Apple is reducing the dependence. As for now, all the iPads and manufactured in China, so it’s the first time that Apple will manufacture the iPads somewhere else than China.
The bottom line is that Vietnam is itself a very underdeveloped country and Apple’s profit might even be multiple folds bigger than the entire economy of Vietnam. With this being said, Vietnam’s economy will be improved and Apple’s profit margins will increase subsequently.