Apple Suppliers Looking to Manufacture in Vietnam
Facts
- Two of tech giant Apple's main suppliers, Taiwan-based Foxconn and Luxshare Precision Industry, are reportedly in talks to manufacture Apple Watches and Macbooks in Vietnam for the first time.
- In the wake of the COVID pandemic and related supply chain interruptions, Apple has been shifting some elements of iPhone production from China to other countries, including India, where it began manufacturing the iPhone 13 this year.
- Countries like India, as well as Mexico and Vietnam, are becoming increasingly important labor markets for contract manufacturers supplying American brands as they try to diversify production away from China.
- Apple has asked suppliers to set up a MacBook test production facility in Vietnam after the mass production shift had slowed due to the pandemic.
- Like other global manufacturers, Foxconn has dealt with severe shortages of chips from lingering pandemic-related supply chain bottlenecks, with the Ukraine war also straining logistical channels.
- Last week, Foxconn issued a cautious outlook for the current quarter, citing slowing smartphone demand after a pandemic-related boom. The note of caution comes after the company had previously exceeded the expectations of analysts and investors during the pandemic.
Sources: Cnbctv18, Al Jazeera, Hindubusinessline, and Reuters.
Narratives
- Pro-establishment narrative, as provided by Industry Leaders Magazine. China's Zero-COVID policy, as well as the country's silence on the Russian invasion of Ukraine, highlight Apple's need to shift its primary manufacturing away from the PRC. The company can find other countries with cheap and available labor, so this news is a net positive for the global economy.
- Establishment-critical narrative, as provided by China Underground. For anyone thinking companies like Apple make their manufacturing decisions based on human rights, they should delve a little deeper into the issue. The real reason they're joining Nike and Adidas in moving to Vietnam isn't a reaction to China's alleged human rights abuses, it's because COVID disrupted the supply chain and PRC wages have been on the rise.