Apple Eyes Apple Watch and MacBook Production in Vietnam

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Bisnis.comJAKARTA – Apple is in talks to make Apple Watches and MacBooks in Vietnam for the first time.

Quotes Nikkei Asiathe action of the US technology giant is trying to diversify production from China.

Apple suppliers Luxshare Precision Industry and Foxconn have started test production of the Apple Watch in North Vietnam with the aim of manufacturing the device outside of China for the first time, three people with direct knowledge of the matter told Asian Nikkei.

Vietnam is already Apple’s most important manufacturing hub outside China, producing a wide range of flagship products for the American company, including iPad tablets and AirPods earphones.

The Apple Watch is even more sophisticated, according to industry experts, who say that putting so many components into such a small box requires a high level of technological skill. Producing devices will be a boon for Vietnam as the country seeks to further enhance its technology manufacturing sector.

Apple has also continued to shift iPad production to Vietnam after the COVID-related lockdown in Shanghai caused massive supply chain disruptions. BYD of China was the first to help with this change, although sources told Nikkei Asia that Foxconn is also now helping build more iPads in the Southeast Asian country.

Apple is also in talks with suppliers to build a test production line for the HomePod smart speaker in Vietnam, the people said.

On the MacBook front, Apple has asked suppliers to set up a test production line in Vietnam, two sources said. However, progress in moving mass production into the country has been slow, partly due to pandemic-related disruptions but also because notebook computer production involves a larger supply chain, sources said. The network is currently based in China and is highly cost-competitive, they added.

“AirPods, Apple Watch, HomePod and more … Apple has big plans in Vietnam, beyond manufacturing iPhones,” said one person with direct knowledge of the situation. “Components for MacBooks have become more modularized than ever before, which makes it easier to manufacture laptops outside of China. But how to make them cost-competitive is another challenge.”

Apple’s diversification into Vietnam began with the AirPods, which began mass production there in 2020. The earphones were one of the first Apple products to be moved from China after the trade war between Washington and Beijing broke out under former US President Donald Trump.

The move signals a change of approach for Apple, which has relied on China for nearly all of its production needs for decades.

For Vietnam, Apple’s change – and broader US-China tensions – has been a boon. The number of Apple suppliers with facilities in the country has risen to at least 22 from 14 in 2018, according to Nikkei Asia’s analysis of Apple’s latest available supplier list and interviews with sources.

Many other major electronics manufacturers such as Google, Dell and Amazon have also set up production in Vietnam to diversify outside of China, Nikkei Asia previously reported.

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