Apple Inc. has announced plans to begin manufacturing its famous MacBook line of laptops in Vietnam by the middle of 2023. This is part of the tech giant's ongoing efforts to make its supply chain more diverse and less dependent on China.
Nikkei Asia reports that Apple has engaged its top supplier, Taiwan's Foxconn, to build MacBooks in the Southeast Asian nation as early as May. Apple has been attempting to add production sites outside of China for all of its primary product lines.
Still, doing so for the final one, the MacBook, has taken longer due to the intricate supply chain needed for making laptop computers.
Apple Brings Production to Southeast Asia
Apple produces between 20 million and 24 million MacBooks per year, with production split between sites in Chengdu, Sichuan Province, and Shanghai. The Cupertino-based company is projected to invest millions of dollars in the facility, which will result in the creation of hundreds of new jobs in the area.
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According to the same Nikkei report, the shift to Vietnam comes amid not just increased geopolitical tensions, but also industrial disruptions caused by China's zero-COVID restrictions and uncertainty induced by their recent loosening.
Apple announced in November that it had temporarily limited iPhone 14 production due to Covid-19 restrictions at its principal iPhone 14 Pro and iPhone 14 Pro Max manufacturing factory in Zhengzhou, China.
The Foxconn-run factory is running at "substantially reduced capacity," according to Apple. It cautioned that it would ship fewer products and that customers would suffer lengthier wait times when ordering devices.
What This Means
In August, Luxshare Precision Industry, Apple's Chinese supplier, and Foxconn, a Taiwan-based supplier, began testing production of the Apple Watch in northern Vietnam.
The iPhone maker has asked suppliers to set up a test production line in Vietnam for the MacBook, adding that progress in moving mass production to the country has been very slow due to pandemic-related disruptions but also because notebook computer production involves a massive supply chain.
The decision to move manufacturing to Vietnam comes as Apple looks to mitigate the risks of relying too heavily on a single market, especially in the face of ongoing trade tensions between the United States and China. It also follows a similar move by fellow tech giant Samsung, which announced earlier this year that it would begin producing some of its smartphones in Vietnam.
Moreover, Apple plans to significantly increase iPhone production in India this year and next, with the goal of turning the country into another key production base for the devices, according to sources close to Nikkei. The company also plans to move some AirPods and Beats earphone production to India.
Apple's expansion into Vietnam is expected to boost the country's economy and bring new investment to the region. It is also seen as a strategic move by the company to tap into Vietnam's growing middle class and expand the consumer market.
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