Apple Reportedly Considering Moving Up to 30% of Production Out of China to Diversify Supply Chain

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Apr 12, 2001
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With the U.S.-China trade war seemingly showing no signs of slowing down, a new report claims that Apple is getting serious about diversifying its supply chain in an effort to reduce its reliance on Chinese manufacturing.

iPhone disassembly robot Daisy

Specifically, Apple has asked several of its major suppliers to evaluate the cost implications of shifting 15 to 30 percent of their production capacity from China to Southeast Asia countries as it prepares for a "fundamental restructuring of its supply chain," according to the Nikkei Asian Review.
Key iPhone assemblers Foxconn, Pegatron, Wistron, major MacBook maker Quanta Computer, iPad maker, Compal Electronics, and AirPods makers Inventec, Luxshare-ICT and Goertek all have been asked to evaluate options outside of China, multiple sources say. Many other Apple suppliers such as print circuit board and casing providers are closely monitoring where these major assemblers would shift their production.
The countries being considered for diversification include Mexico, India, Vietnam, Indonesia, and Malaysia, with India and Vietnam among the favorites for iPhone assembly, according to the report. Apple supplier Wistron already assembles a limited quantity of iPhones in India.

As part of the efforts, Apple reportedly has a so-called "capital expense studies team" tasked with negotiating with suppliers and governments.

While these plans are said to have been triggered by the trade war, the report claims that Apple has decided the risks of relying so heavily on manufacturing in China are "too great and even rising" even if the trade war is eventually resolved.
"A lower birthrate, higher labor costs and the risk of overly centralizing its production in one country. These adverse factors are not going anywhere," said one executive with knowledge of the situation. "With or without the final round of the $300 billion tariff, Apple is following the big trend [to diversify production]," giving itself more flexibility, the person added.
Apple currently relies on Chinese and Taiwanese companies for the vast majority of its manufacturing needs, so diversifying its supply chain would obviously take time. The report cites a source who believes it would take at least 18 months for production to begin in new locations.

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Article Link: Apple Reportedly Considering Moving Up to 30% of Production Out of China to Diversify Supply Chain
 

Remy149

macrumors 6502
Oct 20, 2016
368
671
Tariffs work.
Not really they are just gonna move production to a different Asian country
[doublepost=1560948803][/doublepost]
So much for bringing jobs back to America! MAGA!
Sure everyone would be happy about iPhones being manufactured in the USA when they become something only the wealthy could realistically buy
 

genovelle

macrumors 65816
May 8, 2008
1,081
935
Sounds reactive rather than proactive. Surprising considering Apple is usually good at diversifying properly.
Most countries like the US and other western countries have not made the investment in infrastructure and supply chain support to produce on scale. To do so independently can be cost prohibitive. Apple is now of a size and unit volume that supports an ecosystem being built around them. That was not the case just 5 to 6 years ago. Keep in mind they have been testing and doing limited manufacturing in some of these other countries over the last 3 or 4 years, but I’m sure they did not anticipate an unnecessary trade war being waged at their expense.
[doublepost=1560949001][/doublepost]
Difficult situation here, price hike for Trump taxes, or price hike for higher production cost? hmmmm
And that still doesn’t include adding a single US job.
[doublepost=1560949043][/doublepost]
I say:
Bring all the production to the separatist southern states, as they want to secede from the union under the MAGA banner: cheap labor, no taxes, state give-backs, and even fly proudly the confederate flag.

MSSGA ::= Make Southern States Great Again./s
Let me out first.
 

Doug0915

macrumors member
Jul 20, 2011
31
14
And People wonder why Apple holds on to a mound of overseas cash.

This is why. That cash mound will come in real handy if they have to move manufacturing out of China.
 
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Alessiot

macrumors member
Sep 13, 2016
96
43
About time they did



With the U.S.-China trade war seemingly showing no signs of slowing down, a new report claims that Apple is getting serious about diversifying its supply chain in an effort to reduce its reliance on Chinese manufacturing.


iPhone disassembly robot Daisy

Specifically, Apple has asked several of its major suppliers to evaluate the cost implications of shifting 15 to 30 percent of their production capacity from China to Southeast Asia countries as it prepares for a "fundamental restructuring of its supply chain," according to the Nikkei Asian Review.The countries being considered for diversification include Mexico, India, Vietnam, Indonesia, and Malaysia, with India and Vietnam among the favorites for iPhone assembly, according to the report. Apple supplier Wistron already assembles a limited quantity of iPhones in India.

As part of the efforts, Apple reportedly has a so-called "capital expense studies team" tasked with negotiating with suppliers and governments.

While these plans are said to have been triggered by the trade war, the report claims that Apple has decided the risks of relying so heavily on manufacturing in China are "too great and even rising" even if the trade war is eventually resolved.Apple currently relies on Chinese and Taiwanese companies for the vast majority of its manufacturing needs, so diversifying its supply chain would obviously take time. The report cites a source who believes it would take at least 18 months for production to begin in new locations.

Article Link: Apple Reportedly Considering Moving Up to 30% of Production Out of China to Diversify Supply Chain
 
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