The move aims to reduce the political risk of producing in China.
Apple has requested that its manufacturer Foxconn move some of its production to Vietnam. The move appears to be in response to the incipient trade war that is percolating between the US and China.
This is according to a person with knowledge of the plan who spoke with Reuters.
The development comes as the outgoing administration of U.S. President Donald Trump encourages U.S. firms to shift production out of China. During Trump’s tenure, the United States has targeted made-in-China electronics for higher import tariffs, and restricted supplies of components produced using U.S. technology to Chinese firms it deems a national security risk.
Taiwanese manufacturers, wary of the dangers posed by a potential trade war, have moved or are considering moving some production from China to countries such as Vietnam, Mexico and India.
Apple iPad and MacBook are targeted
Foxconn is building assembly lines for Apple’s iPad tablet and MacBook laptop at its plant in Vietnam’s northeastern Bac Giang province, to come online in the first half of 2021, the person said.
The person also declined to identify themselves, as the plan was private.
The lines will also take some production from China, the person said, without elaborating how much production would shift.
Apple requested the move, the person said. “It wants to diversify production following the trade war.”
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For now, Apple and Foxconn are both staying silent
Foxconn said in statement: “As a matter of company policy, and for reasons of commercial sensitivity, we do not comment on any aspect of our work for any customer or their products”. Apple did not immediately respond to a Reuters request for comment.
Taiwan’s Foxconn, formally Hon Hai Precision Industry Co Ltd, on Tuesday announced a $270 million investment to set up a new subsidiary called FuKang Technology Co Ltd. This move the person said aimed at supporting the Vietnam expansion.
The contract manufacturer also plans to make television sets at the Vietnam plant for clients including Japan’s Sony Corp, with the beginning of such production slated for late 2020 to early 2021, the person said. Sony declined to comment.
The factory will also make other electronic products such as computer keyboards, the person said.
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