Apple is moving some iPad production from China to Vietnam due to ongoing supply chain disruptions, according to a report. This is the first time that the Cupertino company is shifting the manufacturing of its iPad models out of China. One of the major reasons for Apple to move its iPad manufacturing to Vietnam is to overcome the restrictions that emerged due to strict COVID lockdowns in Shanghai and other cities of the country. However, the US tech giant is also in plans to reduce its reliance on China in general — due to the authoritarian government.
Citing people familiar with the development, Nikkei Asia reports that China’s BYD helped Apple build production lines in Vietnam. The contract manufacturer is said to soon start producing a small number of iPad models in the country.
Apple is said to have asked its suppliers to develop additional supplies of components including printed circuit boards to avoid supply constraints, especially for the parts that are made in and around Shanghai where COVID-related restrictions are currently impacting usual business.
The company is asking its supply partners outside the lockdown-affected areas to help develop component supplies for a couple of months for all its product lines, the report said.
Apple is also said to have helped some suppliers to meet with the additional logistics costs to maintain adequate supplies.
Although Shanghai is gradually opening up, component suppliers in the city and Jiangsu Province are expecting to take “at least a couple of months” to get their manufacturing capacity return to normal.
Apple declined to comment to Nikkei Asia, though Gadgets 360 reached out to the company for clarity on the reported details. This article will be updated when the company responds.
For some time, Apple is looking to reduce its dependency on China and is planning to shift its production to the next possible market for which Vietnam seems to be the most appropriate choice.
The primary reason for Vietnam being Apple’s top-most selection over China is the ease of getting labour and other resources for manufacturing products including the iPad. However, due to very complex input supply chains, the company may not be able to shift its entire iPhone production to any market outside China in the coming future.
TF Securities Analyst Ming-Chi Kuo recently pointed out that Apple’s move its production capacity to India involves “potential geopolitical risks,” which is not the case with Vietnam.
Alongside Apple, Samsung has deep production-side integrations within Vietnam that have already helped the company limit some of its supply hurdles to some extent.
Apple has so far dominated the tablet market globally, following Samsung. According to a recent report by IDC, the iPad captured 31.5 percent of the tablet market worldwide in the first quarter. Samsung, on the other hand, retained its second position, with a share of 21.1 percent.