Vietnam to become one of Apple’s main manufacturing hubs
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India, Vietnam and Brazil could account for as much as 30% of Apple supplier’s Foxconn production in upcoming years as Apple seeks to diversify its supply chain out of China.
Key electronics manufacturers are moving faster to diversify their capacity globally, taking advantage of local incentive policies, according to Counterpoint Research analysts Ivan Lam and Shenghao Bai as cited.
“Led by Foxconn and Pegatron, companies have already invested in factories, production lines, relatively advanced manufacturing processes, and personnel training in India,” they wrote.
The country’s vast population and high birth rate make it an attractive market for end-products as well as a manufacturing base, while Vietnam’s workforce offers lower labor costs than in China, they added.
According to the report, Vietnam has attracted 21 Apple suppliers to operate in the country, though it lacks the ability to produce the all-important iPhone handset.
Apple has reportedly tapped its top supplier, Taiwan’s Foxconn, to start making MacBooks in Vietnam as early as around May next year.
The company has been working on plans to move some MacBook manufacturing to Vietnam for nearly two years, and has set up a test production line in the country.
Vietnam will make 65% of Apple wireless AirPods by 2025 as the U.S. tech giant continues to shift its production away from China, JP Morgan analysts have forecast.
The country would also reportedly account for 20% of iPad and Apple Watch output and 5% of MacBook.
Foxconn, a key supplier, in August leased 50.5 hectares of land in Bac Giang Province and plans to build a $300-million factory there, employing 30,000 workers.
Questions & Answers
Q.What percentage of Apple's global production could be accounted for by the new manufacturing hubs?
What percentage of Apple's global production could be accounted for by the new manufacturing hubs?
India, Vietnam, and Brazil could collectively account for as much as 30% of Apple supplier Foxconn's production in the coming years. This forms part of Apple's strategy to diversify its supply chain away from China.
Q.Which specific Apple products are planned for manufacture in Vietnam and by when?
Which specific Apple products are planned for manufacture in Vietnam and by when?
Vietnam is forecast to make 65% of Apple's wireless AirPods by 2025. Also, the country would reportedly account for 20% of iPad and Apple Watch output, and 5% of MacBook production. MacBook manufacturing is set to begin around May next year.
Q.What is Foxconn's investment plan in Vietnam to support increased production?
What is Foxconn's investment plan in Vietnam to support increased production?
Foxconn leased 50.5 hectares of land in Bac Giang Province in August. They plan to build a new factory there with an investment of $300 million, which is expected to employ 30,000 workers.
Q.What are the primary reasons cited for Apple's suppliers choosing Vietnam as a manufacturing location?
What are the primary reasons cited for Apple's suppliers choosing Vietnam as a manufacturing location?
Vietnam's workforce offers lower labour costs compared to China, making it an attractive location for manufacturing. Key electronics manufacturers are also taking advantage of local incentive policies when diversifying their global capacity.
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