China unrest: Apple may begin MacBook production in Vietnam by mid-2023

Taipei, Dec 20

Apple is planning to begin production of MacBooks in Vietnam by mid-2023, as it continues to diversify its production base away from China to other countries, including India, the media reported on Tuesday.

The tech giant has tapped its top supplier Foxconn to start making MacBooks in the Southeast Asian nation as early as around May, reports Nikkei Asia, citing sources.

According to the report, the iPhone maker aims to have 'out of China' production alternatives for key products amid Covid lockdowns that hampered its supply chain.

Apple plans to move some MacBook production to Vietnam for the first time next year as it "continues diversifying its production base away from China amid escalating tech tensions between Washington and Beijing," the report mentioned.

As per a Counterpoint Research report, Foxconn aims to shift up to 30 per cent of its capacity to India, Vietnam and Brazil.

It had already developed "rather high production capacities in India and Vietnam before the recent disruption at its Zhengzhou plant" in China.

As of September 2022, there were 21 Apple suppliers in Vietnam.

When it comes to smartphone production, manufacturing in India grew 16 per cent (year-over-year) in Q2 2022 (April-June) to reach over 44 million units, said the Counterpoint report.

Earlier, The Wall Street Journal reported that Apple is "telling suppliers to plan more actively for assembling Apple products elsewhere in Asia, particularly India and Vietnam" in order to "reduce dependence on Taiwanese assemblers led by Foxconn".

The contribution of domestic iPhone manufacturing in India jumped from 50 per cent in 2019 to 73 per cent in 2021, according to market research firm CMR.

In the meantime, the percentage of imported iPhones to India decreased from 50 per cent in 2019 to 45 per cent in 2020, 27 per cent in 2021 and around 15 per cent this year -- showing a significant Make in India's boom for Apple.

Apple aims to ship 40-45 per cent of iPhones from India compared with a single-digit percentage currently, according to analyst Ming-chi Kuo.