Sunday 21 July 2019

Apple weighs production shift from China

 

US President Donald Trump threatened further tariffs on Chinese goods
US President Donald Trump threatened further tariffs on Chinese goods

Sathvik N

Apple has asked its major suppliers to assess the cost implications of moving 15pc-30pc of their production capacity from China to Southeast Asia as it prepares for a restructuring of its supply chain, according to the 'Nikkei Asian Review'.

Apple's request was a result of the extended Sino-US trade dispute, but a trade resolution will not lead to a change in the company's decision, Nikkei said citing multiple sources.

The iPhone maker has decided the risks of depending heavily on manufacturing in China are too great and even rising, it said.

Key iPhone assemblers Foxconn, Pegatron Corp, Wistron Corp, major MacBook maker Quanta Computer, iPad maker Compal Electronics, and AirPods makers Inventec Corp, Luxshare-ICT and Goertek have been asked to evaluate options outside of China, Nikkei reported.

The countries being considered include Mexico, India, Vietnam, Indonesia and Malaysia. India and Vietnam are among the favourites for smartphones, Nikkei said, citing sources who did not want to be identified.

Last week, Foxconn said it had enough capacity outside China to meet Apple's demand in the American market if the company needed to adjust its production lines, as US President Donald Trump threatened to slap further $300bn tariffs on Chinese goods. China is a key market for Apple as well as a major production centre for its devices.

A group of more than 30 people from Apple's capital expense studies team have been negotiating production plans with suppliers and governments over monetary incentives that could be offered to lure Apple manufacturing, the report said.

Reuters

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