Apple has apparently advanced its plans to expand manufacturing outside of China, telling contract manufacturer partners that it is aiming to diversify production. This is according to a report posted today by the Wall Street Journal.
Although some of Apple’s products are already produced in countries like Vietnam and India, the vast majority of Apple’s manufacturing takes place in China, at Foxconn and Pegatron facilities.
The Journal says that Apple has been considering geographic expansion plans for a while, but the pandemic put a pause to any immediate changes. However, the recent bout of strict lockdowns in Shanghai has reaffirmed the need to diversify.
China is also risky geopolitically. Its ongoing clashes with the United States on trade is also problematic.
However, it is hard for any other country to compete, as only China is big enough to meet Apple’s huge order requirements. Finding cheap, qualified, labor elsewhere is difficult. The transition to alternative production hubs like India or Vietnam will be slow and gradual. For Apple, this means the supply chain for new products (like the AR headset) will likely be predominantly based outside of China.
Apple production partners like Foxconn have already established facilities in India to help produce iPhones for the domestic market there. A further expansion would see iPhones made in India and then exported for global sale.
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