By: Dominique Magtoto
As the U.S. tech giant plans to diversify its production chain, Apple is in negotiations to produce Apple Watches and MacBooks in Vietnam this 2023, marking a further win for the Southeast Asian country and the entire region.
With the assistance of its top supplier, Foxconn, the company is making progress to lessen its reliance on China to produce many of its products, including iPhones, AirPods, HomePods, and MacBooks.
Apple presents a variety of justifications for this move, with the most significant spur being the backdrop of China’s COVID restrictions, the fact that the US-China trade war shows no signs of de-escalating and issues including labor unrest.
Chiu Shih-fang, a supply chain analyst at the Taiwan Institute of Economic Research, said in a separate interview with Nikkei Asia that “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. 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. For the past two years, the company has been preparing to relocate some of its MacBook manufacturing to Vietnam, and it is anticipated that production will begin as early as May 2023. On the other hand, Apple has already started producing iPhones in India and has been in discussions about producing AirPods there as well, with plans to increase output over the next two years.
These two countries are both top alternatives for Apple. Nevertheless, Vietnam has several advantages as a location for shifting the production processes away from China.
With this, Apple’s relocation procedure may result in making Vietnam, a fast-growing economy and the third biggest market in Southeast Asia, into one of its most important production centers, thereby boosting device production volume in this market and for international investors.
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