According to a source, Apple is shifting some iPad manufacturing from China to Vietnam owing to continued supply chain difficulties. This is the first time the Cupertino business has moved the production of its iPad models out of China.
One of the primary reasons for Apple’s decision to relocate iPad production to Vietnam is to avoid constraints imposed by tight COVID lockdowns in Shanghai and other cities around the country. However, the US IT giant intends to lessen its overall reliance on China owing to the repressive regime. More than half of Apple’s 200 major suppliers have operations in Shanghai and the neighboring areas. In Shanghai, 31 businesses operate manufacturing facilities that supply Apple.
Apple iPad Production shifted to Vietnam
According to a media source on Wednesday, Apple is intending to relocate some iPad manufacturers out of China to Vietnam in response to Covid-lockdowns in and around Shanghai.
As shown in a Nikkei Asia report, Apple has asked several component suppliers to increase their stock levels in preparation for potential shortages and supply chain concerns. According to the article, “the iPad will become the second big line of Apple goods built in the Southeast Asian country, following the AirPods earphone series.”
The year before, Apple sold 58 million iPads. BYD, one of China’s top iPad assembly companies, assisted Apple in establishing production lines in Vietnam. It “may soon begin to produce a small number of the renowned tablets there,” according to the insider.
Apple has also allegedly instructed several of its suppliers to stockpile component supplies for all of its products in order to avoid future shortages.
According to reports, the business rushed rapidly to secure the supply of semiconductors, notably those for power management, for the next iPhone models. Apple is also thought to have borne certain logistics and shipping fees for suppliers in order to ensure that supplies required for manufacture arrive on time.
Apple expects its suppliers to be able to produce enough more components in the coming months to fully compensate for the delays in China, but suppliers are believed to be concerned about decreasing demand, which might leave them with enormous stocks of unused components.
Nonetheless, experts believe that the impact of supply chain disruption on large clients such as Apple is “controllable,” with automakers and smaller Android and PC firms suffering the most.
India is also rumored to be under consideration by Apple, albeit production of the iPhone would be constrained for some time.
According to TF Securities Analyst Ming-Chi Kuo, Apple’s relocation of production capacity to India contains “possible geopolitical dangers,” which Vietnam does not.
Together with Apple, Samsung has significant production-side integrations in Vietnam, which have already helped the business mitigate some of its supply challenges.