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As Companies Divert From China, Vietnam Poised to Become Major Apple Producer

When production begins, as early as mid-2021, it will mark the first time that Apple is producing a significant number of its iPads outside of China.

Nikkei Asia reports that the move is part of Apple's larger efforts to diversify where its products are manufactured and rely less on China. The American technology behemoth will also begin producing iPhones in India and Mac Minis in Malaysia, and announced plans to move production of some of its MacBook production to Vietnam as well this year.

Several months ago, Apple's largest supplier, Taiwanese-owned Foxconn, began preparing to shift production of iPads and MacBooks to Vietnam. Earlier this month they received their official license to set up a US$270 million, 10,000-worker manufacturing plant in Bac Giang. Similarly, Luxshare Precision Industry (Luxshare-ICT) is amping up their production of HomePod minis in Vietnam and Goertek, a key Apple AirPods assembler, began production of AirPods in the country last year. 

A number of factors are motivating Apple to look to Southeast Asia to assemble its products and depend less on China. Experts claim China's rising labor costs, the nation's trade war with America and supply chain disruptions resulting from the COVID-19 pandemic have underscored the dangers of over-relying on a single country for manufacturing.

The belief extends across the tech sector and includes companies such as Microsoft, Sony and Nintendo. While some experts have predicted an easing of tensions between China and America under the Biden administration, the new US president has not said that he would remove any of his predecessor's tariffs yet.

[Photo via PxHere]