While China continues to reel in with its increasing COVID-19 cases and the lockdowns, Apple has urged its suppliers to shift more iPad production to Vietnam.
NEW YORK, NEW YORK - MAY 21: Recently released iPad Pros are seen at the 5th Avenue Apple store on May 21, 2021 in New York City. Apple recently launched new consumer products.
"First Time Ever"
Although China has enforced zero-tolerance coronavirus measures to control the cases, the disruption effects of mass factory closures are persisting.
In fact, more than half of Apple's main suppliers are found within the COVID-19 impacted Shanghai region, which has greatly affected iPad production. Hence, the company is reportedly trying to compensate for this disruption.
According to Nikkei Asia's report, Apple will be moving some of its iPad production established in China to Vietnam. The report claimed that this is the "first time ever" that the company has shifted its production to another country.
However, it is worth noting that Apple has already asked Foxconn to shift its iPad and MacBook Pro production from China to Vietnam in 2020, according to Apple Insider.
A report by Nikkei back in January of last year stated that the company was already planning to move a significant amount of its iPad manufacturers to the southeast-Asian country and also India.
The report further claimed that Apple's plan could commence by the middle of 2021, but due to the COVID spike last year, the plans were delayed.
It is also worth noting that the majority of the iPad's supply chain is established in China. The continuing supply chain disruption caused by widespread lockdowns in China has ultimately affected Apple's decision to move some of its production out of the country.
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Production Lines in Vietnam
Besides Apple's plan to shift production - China's BYD, one of the leading iPad assemblers, has already helped the tech giant in establishing production lines in Vietnam.
The lines could be operational as soon as possible, but it is expected to produce only a small proportion of iPads in the meantime.
Furthermore, the California-based tech company has also urged its suppliers to move quickly so that they can soon secure supplies of the chips needed for the upcoming iPhones.
The request will also be applied to Apple's product lines - including iPhones, MacBooks, iPads, and AirPods.
Apple is also reportedly asking its component suppliers to establish their stock inventories. Although the company usually strays away from tying up capital in inventory, its goal now is to have protection against future production problems and supply shortages.
On Wednesday, Shanghai started reopening the city and resuming the regular order of production and living after two months of its citywide lockdown.
In the latest earnings report by Apple, CEO Tim Cook stated that their estimation of the constraints caused by Shanghai's lockdown could be in a range of $4 to $8 billion losses.
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This article is owned by Tech Times
Written by Joaquin Victor Tacla
