Foreign Media Reports Continue
Some iPad Lines Moving to Vietnam
iPhone and MacBook Diversification Also Under Review
[Asia Economy Reporter Cha Min-young] Apple is relocating part of its iPad production line to Vietnam as part of its strategy to reduce reliance on China. Once committed to an 'all-in on China' strategy, Apple is now diversifying its manufacturing bases amid US-China tensions, prompting global IT companies to closely monitor Apple's moves.
According to reports from IT之家 (IT Home), Nikkei Asia, and other foreign media on the 2nd, Apple plans to shift some of the iPad mass production volume, which had been concentrated in China since the outbreak of COVID-19, to Vietnam for the first time. It is known that Chinese iPad parts assembler BYD is supporting the establishment of the iPad production line in Vietnam. Once the production line is completed, it will be able to handle some of the iPad volume.
Within Apple, diversification of product supply bases has been under consideration since early last year, but plans were inevitably postponed due to deteriorating local conditions in candidate countries such as India and Vietnam. However, with the spread of the COVID-19 pandemic centered on major Chinese cities including Shanghai earlier this year, changes in supply chain policies became unavoidable. Recently, as US-China tensions have escalated, there are also views that Apple, as a US company, hastened its decision considering the international situation.
In particular, the decrease in iPad shipments compared to the previous year due to supply constraints was a significant factor. In the second quarter of 2022 (based on the September fiscal year-end), iPad sales amounted to $7.65 billion (approximately 9.54 trillion KRW), a 1.92% decrease compared to the same period last year. Apple CEO Tim Cook explained, "As expected, we faced severe supply constraints, but iPad demand remains strong."
Besides the iPad, production bases for the iPhone, MacBook, and others are also expected to diversify. The US Wall Street Journal (WSJ) reported on the 21st of last month that "Apple is considering reducing its production share in China, which currently exceeds 90%, and distributing production to countries such as India and Vietnam." It is also reported that Apple has informed its subcontractors of plans to expand product manufacturing outside China.
It is anticipated that the global delivery delays of Apple products will also be partially resolved. On the official Apple Korea website, new product deliveries, including the iPad, M1 iMac, and Apple Studio Display, are currently delayed.
Meanwhile, there are also views that Apple's de-China strategy could reduce global IT companies' dependence on their Chinese bases. Guo Mingqi, an 'Apple expert' and analyst at TF International Securities, pointed out, "If companies like Apple move and create working environments in India or Vietnam, a chain reaction of other companies relocating could begin."
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