Nikkei: Apple Watch and MacBook production lines can move to Vietnam

Apple suppliers, Luxshare Precision Industry and Foxconn, have begun testing Apple Watch production in northern Vietnam with the goal of producing the device for the first time outside of China. sources with knowledge of the matter said.

Vietnam is already one of Apple’s most important manufacturing hubs outside of China, producing a range of key products for the American company, including iPad tablets and AirPods headphones.

The Apple Watch is even more sophisticated, according to industry experts. They say that putting so many parts inside such a small device requires an extremely high level of technology. Successful production of this device will be a victory for Vietnam in its efforts to strengthen the technology manufacturing sector.

Apple also continued to move iPad production to Vietnam after the blockade against COVID-19 in Shanghai caused many disruptions in the supply chain. BYD in China was the first to support this shift, although several sources told Nikkei Asia that Foxconn is also helping to build iPad production in Vietnam. Apple is also negotiating with suppliers to build a trial production line for HomePod products in Vietnam.

Regarding MacBook products, Apple has asked suppliers to set up a trial production line in Vietnam, according to 2 sources of Nikkei Asia. However, the process of moving the massive production line to Vietnam has been slowed down, partly due to the disruption caused by the COVID-19 epidemic, and also because the MacBook production line involved a chain. larger supply, according to multiple sources. The network is now China-centric and very competitive on price, they added.

“AirPods, Apple Watch, HomePod and more…Apple has big plans in Vietnam, in addition to producing iPads,” Nikkei quoted a person familiar with the matter as saying. “MacBook components have become more monolithic than they used to be, which makes it easier to manufacture them outside of China. But how to make them competitive on price is another question.” another challenge.”

Apple’s shift to Vietnam has begun with the AirPod, which has been mass-produced in Vietnam since 2020. This headset model is among the first Apple products to have the assembly process moved. out of China after the trade war between Washington and Beijing broke out under US President Donald Trump.

The move signals a change in approach from Apple, which has been dependent on China for the production of its devices for decades.

According to Nikkei Asia, Apple’s shift – amid rising US-China tensions – will bring many benefits to Vietnam. The number of Apple suppliers with manufacturing facilities in Vietnam increased from 14 to at least 22 in 2018, according to Nikkei Asia data. Many other major electronics manufacturers such as Google, Dell and Amazon have also placed production lines in Vietnam to diversify outside of China.

Eddie Han, an analyst at Isaiah Research, told Nikkei Asia that electronics manufacturers are trying to strike a balance amid tensions between the US and China.

“Geographically, we can see that many international electronics brands such as Apple and Samsung are trying to reduce their dependence on manufacturing products in China. But on the other hand, the international players. This economy also accepts more China-based suppliers, such as Luxshare and BYD for Apple, Huaqin for Samsung,” said Mr. Han. “These are moves to balance the geopolitical implications.”

“China’s position as the world’s most important producer has been challenged since the outbreak of the trade war, and then because of the zero-COVID policies,” Han said. “This makes Vietnam an ideal destination for many electronics manufacturers, while the country is gradually developing a supply chain ecosystem.”

Source: Nikkei Asia