Apple to start Macbook production in Vietnam next year

At Apple’s request, Taiwan’s Foxconn relocated Chinese factories to Vietnam to produce Macbooks, the brand’s only products that were only assembled in China. A news that marks the acceleration of the Chinese “decoupling” of Apple.

Next year, many Macbooks around the world will have a new provenance engraved on the bottom: Made In Vietnam. While Made In China products could face an additional tax, or even bans on entry into the United States within a few weeks, Apple is accelerating in reducing its dependence on Chinese factories. Its production partner, Taiwanese Foxconn, has started moving production lines 50 kilometers from Hanoi in northern Vietnam. A region where the world number 1 in the assembly of technological products already has industrial sites (factories, warehouses). And which has a proximity to China, since the border is only 125 km away.

Read also: Apple could relocate the manufacture of its iPad and MacBook to Vietnam (Nov. 2020)

While Apple once made some of its products outside of China, Macbook laptops were the only products that remained 100% made in China. A situation that will therefore quickly change with the rise of Vietnam and other countries: according to Counterpoint Research, Vietnam, India and Brazil could quickly represent up to 30% of total Macbook production. It is here for Apple not to cut itself off from China, but to reduce the risks. The first being dependence on a country that has the power to unilaterally close factories. The rises in COVID cases in the country have been dealt with very brutally by the country, which continues to massively confine cities and industrial sites. Which will cost Apple a fortune for Christmas, since millions of iPhones could not be produced.

Read also: Apple Accelerates Effort to Reduce Reliance on Chinese Factories (Dec. 2022)

Then there is the increasingly tense relationship between the two governments. And the risks, for the entire tech industry, of a closure and/or a tax on exports. Between the blacklists, the bans on technological exports (high-powered chips), the vetoes on the sale of factories or even the increase in customs tariffs, the tension is mounting in the exchanges communicated. And Apple cannot afford not to vary its sources of supply for its domestic market, the most important for the American firm.

Vietnam, a country on the rise for Apple

Foxconn (Hon Hai Precision) factories are concentrated in northern Vietnam, near the border with China. / Google Maps

The choice of Vietnam by Foxconn (Hon Hai Precision) and Apple is no coincidence. The first thing to keep in mind is that China is starting to get expensive compared to many Southeast Asian countries. Wages have risen in mainland China, which has to deal with a real estate bubble that it is trying to contain and a rapidly aging population that is beginning to want to make its voice heard. Many industries have developed rapidly in the former French colony for a decade, including Apple. Who already has its HomePod Mini and Airpods produced there. To these two products should soon be added not only the Mavbooks, but also the iPads.

Read also: Apple Accelerates Transfer of iPhone and iPad Production Out of China (Dec 2021)

The country (which is anything but a democracy!) has many advantages such as much lower wages than in China, a young and educated population. As well as geographical proximity to China, which facilitates supply chain protections. This explains why the announcements (or leaks of information) concerning this country are much more numerous than those of the other countries approached to host future factories. Whether Brazil, Indonesia, Malaysia or Mexico, these countries certainly have strengths. But their distance from the “workshop of the world” penalizes them in the execution of a rapid transition. The same goes for India, which nevertheless takes advantage of its gigantism and the future potential of the internal market to strengthen its attractiveness.

Read also: Apple could have all of its product lines “made out of China” within three to five years (Oct. 2022)

It is important to remember that, for now, there is no question for Apple to leave China. Which is not only the second world market for Apple, but also the country with the best industrial know-how in the world. Both in terms of technique – quality of the workers (when they are well paid and well trained) – and in terms of logistics. In addition, the great internal competition and the density of suppliers make it a country where everything can go very quickly, and this, in scales and volumes impossible to achieve elsewhere. Creating or moving Apple production units is a strategy to limit its exposure to a single country. In the purest respect of the adage: ” don’t put all your eggs in one basket »

Source :

South China Morning Post

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