Apple supplier eyes Vietnam expansion
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Apple iPhone assembler Pegatron Corp emphasizes its expansion in other countries, including Vietnam, to reduce its dependence on China following the strict Covid-19 lockdowns there.
“We faced Covid controls for two months. We couldn’t have assessed that in advance, so that makes me emphasize our expansion in Vietnam, India, Indonesia, and North America, Liao Syh-jang, as saying at the company’s annual general meeting in Taipei Wednesday.
The company is seeking to address labor shortages and the gap between peak and low seasons and increase capacity utilization, he said.
Pegatron is one of Apple’s three iPhone suppliers along with Foxconn and Wistron.
In April, the Taiwanese company suspended operations at its Shanghai and Kunshan plants in China due to strict Covid-19 protocols, impacting production and deliveries.
China has since lifted the restrictions, but still faces a labor shortage that was sparked by the restrictions.
Chairman T.H. Tung said the company’s customers had “different reasons” for setting up factories in Vietnam, India and Mexico.
“But one shared factor is the ability to reduce concentration in Shanghai, Suzhou and Chongqing.”
He added that hiring staff in China has become increasingly difficult over the past seven to eight years.
Pegatron has mulled expanding to Vietnam since 2020, and is building a factory in the northern city of Hai Phong.
Several Apple suppliers already have factories in Vietnam, including Foxconn, Luxshare and Goertek, and mainly make AirPods earbuds and HomePod speakers.
Earlier in June, China’s BYD, one of the leading iPad assemblers, had helped Apple build production lines in Vietnam and could soon start to produce the tablet there.
It attributed the move to China’s lockdown in and around Shanghai, which disrupted the supply chain for months.
Questions & Answers
Q.Which specific Apple products will Pegatron manufacture at its new facility in Vietnam?
Which specific Apple products will Pegatron manufacture at its new facility in Vietnam?
The article states that Pegatron is an iPhone assembler, but it does not specify which particular Apple products will be made at its new factory in Hai Phong, Vietnam. Other suppliers in Vietnam mainly make AirPods and HomePod speakers.
Q.What is the primary motivation for Pegatron to expand its operations into other countries?
What is the primary motivation for Pegatron to expand its operations into other countries?
Pegatron is expanding to reduce its reliance on China following the strict Covid-19 lockdowns, which caused production and delivery disruptions. The company also seeks to address labour shortages and improve capacity utilisation.
Q.Besides Vietnam, in which other countries is Pegatron planning to expand its manufacturing operations?
Besides Vietnam, in which other countries is Pegatron planning to expand its manufacturing operations?
Liao Syh-jang stated that Pegatron is emphasising expansion in Vietnam, India, Indonesia, and North America. Chairman T.H. Tung also mentioned Vietnam, India, and Mexico as locations customers are interested in.
Q.What issues have prompted Apple's suppliers, including Pegatron, to diversify their manufacturing locations away from China?
What issues have prompted Apple's suppliers, including Pegatron, to diversify their manufacturing locations away from China?
Suppliers faced strict Covid-19 protocols in China, impacting production and supply chains. Chairman T.H. Tung also noted that hiring staff in China has become increasingly difficult over the past seven to eight years.
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