Apple Accelerates Exit from China: Vietnam and India Emerge as New Manufacturing Hubs
Amid significant disruptions to global supply chains, Apple – the American tech giant – is rapidly shifting its manufacturing operations out of China, turning its focus toward emerging markets like Vietnam and India. This move is not only aimed at minimizing geopolitical risks but also at leveraging cost advantages and favorable investment policies in these countries.
Apple – the American tech giant – is rapidly shifting its manufacturing operations out of China, turning its focus toward emerging markets like Vietnam and India.
1.Vietnam and India: Strategic New Destinations
In India, Apple has begun mass production of its latest iPhone models, including the high-end iPhone Pro
Apple has been expanding its manufacturing network in both Vietnam and India. In Vietnam, the number of Apple suppliers rose by 40% to 35 in 2023. Meanwhile, in India, Apple has begun mass production of its latest iPhone models, including the high-end iPhone Pro – marking a significant strategic pivot away from China.
2.Reasons Behind the Shift
Escalating trade tensions between the U.S. and China have prompted Apple to diversify its supply chain to avoid over-reliance on a single country.
Apple’s decision to relocate its production is driven by several key factors:
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Geopolitical Risk Mitigation: Escalating trade tensions between the U.S. and China have prompted Apple to diversify its supply chain to avoid over-reliance on a single country.
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Competitive Production Costs: Vietnam and India offer abundant labor forces at significantly lower costs compared to China.
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Incentive Policies: The Indian government has launched a Production-Linked Incentive (PLI) scheme with a budget of nearly $6 billion to attract technology manufacturers and investors.
3.The Role of Manufacturing Partners
Foxconn has invested around $700 million in a new facility in India to boost iPhone production.
Apple’s manufacturing partners, including Foxconn, Pegatron, and Tata Group, play a crucial role in this transition. Foxconn has invested around $700 million in a new facility in India to boost iPhone production. Meanwhile, Tata Group aims to become Apple’s first comprehensive supplier based entirely in India.
4.Challenges and Outlook
Apple’s ongoing efforts, a complete withdrawal from China remains challenging.
Despite Apple’s ongoing efforts, a complete withdrawal from China remains challenging. China still plays a critical role in Apple’s global supply chain, especially in the production of high-value electronic and mechanical components.
However, with its current strategic maneuvers, Apple is gradually reducing its dependency on China while scaling up operations in emerging markets. This not only helps Apple mitigate risks but also opens up new growth opportunities in countries like Vietnam and India.
Edited by Luu Hana
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