Economic tensions between the U.S. and China are at an all-time high. That has had an extreme impact on the manufacturing sector—particularly tech gadgets. On Thursday, Reuters reported that Apple wants to move some of its manufacturing out of China.
It has asked Foxconn, its manufacturing partner in the region, to shift some of its iPad and MacBook production lines to Vietnam. The move will help Apple dodge trade tensions with China and diversify its supply chain in the process.
Tariffs on electronics made in China are a nightmare for businesses like Apple. Although the Big Tech giant sells many of its devices in the U.S., it is forced to pay taxes and fees for importing its gadgets.
Many companies are opening up to the idea of moving their production lines out of China in favor of countries with fewer trade tensions. Prime locations include Vietnam, Mexico, and India. Of course, some firms are also taking advantage of incentives that are offered for bringing manufacturing back to the U.S.
In the midst of U.S.-China trade tensions, Apple is making a clear statement that it does not want to be involved. Reuters cites a person “with knowledge of the plan,” who says, “The move was requested by Apple. It wants to diversity production following the trade war.”
Fortunately, Foxconn is already building assembly plants for both the iPad and MacBook in Vietnam. The plant is located in the northeastern province of Bac Giang. Foxconn estimates that the manufacturing facility will be ready to go online in the first half of 2021. Although COVID-19 could still alter those plans, the timeline appears to be fairly established.
In a statement, Foxconn said, “As a matter of company policy, and for reasons of commercial sensitivity, we do not comment on any aspect of our work for any customer or their products.”
Apple also declined to comment on the move.
The New Home
At this point, it remains unclear exactly which devices will be manufactured at the new Vietnamese Foxconn plant. Given the fact that Apple has a number of different iPad and MacBook models, the results could vary.
It is a noteworthy move on several levels. TrendForce notes that all iPads are currently produced in China. As such, the move by Apple and Foxconn makes this the first time that an iPad will be produced in another country.
It also isn’t Apple’s only move to diversify its production. The company is also spending $1 billion to expand an iPhone assembly plant in India.