Apple suppliers in talks on mass production in Vietnam

Apple’s suppliers are in talks to produce Apple Watch and MacBook in Vietnam for the first time, Nikkei Asia reported on Tuesday, quoting informed sources.

Apple’s Chinese supplier Luxshare Precision Industry and Taiwan-based Foxconn have started test production of Apple Watch in northern Vietnam, the report added.

Apple has asked suppliers to set up a test production line in Vietnam for the MacBook, the report said.

Progress in moving mass production to the country has been slow partly due to pandemic-related disruptions but also because notebook computer production involves a larger supply chain.

Apple has been shifting areas of iPhone production from China to other markets, including India, where it started making iPhone 13 this year, and is also planning to assemble iPad tablets.

India, the world’s second-biggest smartphone market, along with countries such as Mexico and Vietnam, is becoming increasingly important to contract manufacturers supplying US brands, as they try to diversify production away from China.

Apple, Foxconn and Luxshare Precision did not respond at once to a Reuters request for comment.

Last week, Taiwanese contract manufacturer Foxconn gave a cautious outlook for the present quarter after posting results that beat expectations, citing slowing smartphone demand after a pandemic-fuelled boom.

Like other global manufacturers, Foxconn — formally called Hon Hai Precision Industry — has dealt with a severe chip shortage that hit production, as pandemic bottlenecks lingered and the Ukraine war also strained logistical channels.

Reuters