The ongoing US-China trade war has been an ugly saga, involving everything from app bans over data security concerns, trade prohibitions over espionage charges using telecom equipment, and raised tariffs that have thrown the future of many companies into jeopardy. The latest company to face the heat is Apple, which has reportedly decided to shift the production of MacBooks and iPads to Vietnam, away from China. It must be noted that chief Apple supply partner – Foxconn – is only moving some iPad and MacBook assembly away from China, and not in its entirety.
“The move was requested by Apple,” a person familiar with the recent developments was quoted as saying by Reuters. “It wants to diversify production following the trade war.” The major shift is reportedly inspired by encouragement from the US government to shift production away from China, prompting Taiwanese firms to look at other destinations such as Vietnam, India, and Mexico to continue serving their deep-pocket US partners such as Apple.
Foxconn is headed towards Vietnam at Apple's request
“Foxconn is building assembly lines for Apple’s iPad tablet and MacBook laptop at its plant in Vietnam’s northeastern Bac Giang province,” the report added. Foxconn’s new assembly line in Vietnam for making MacBooks and iPads is said to become operational in 2021’s first half. However, it is unclear how big a chunk of iPad and MacBook assembly Foxconn is migrating from China to Vietnam.
Foxconn has not shared any details regarding the move, but the company’s latest $270 million investment for setting up a new subsidiary that goes by the name FuKang Technology Co Ltd is reportedly a part of the expansion plans in Vietnam. It is interesting to note that all iPads are exclusively made in China, so this would mark the first time that their assembly is being done out of the country.
Foxconn’s factory in Vietnam will reportedly be used to make TVs for Sony and a few other devices such as keyboards as well. However, Vietnam is not the only country that will serve the purpose of diversifying the production of Apple devices away from China. Foxconn is reportedly investing a billion dollars to expand its facility in India and bolster iPhone production in the country.