Apple Reportedly Considering Moving Up to 30% of Production Out of China to Diversify Supply Chain

With the U.S.-China trade war seemingly showing no signs of slowing down, a new report claims that Apple is getting serious about diversifying its supply chain in an effort to reduce its reliance on Chinese manufacturing.

iphone daisy

iPhone disassembly robot Daisy

Specifically, Apple has asked several of its major suppliers to evaluate the cost implications of shifting 15 to 30 percent of their production capacity from China to Southeast Asia countries as it prepares for a "fundamental restructuring of its supply chain," according to the Nikkei Asian Review.

Key iPhone assemblers Foxconn, Pegatron, Wistron, major MacBook maker Quanta Computer, iPad maker, Compal Electronics, and AirPods makers Inventec, Luxshare-ICT and Goertek all have been asked to evaluate options outside of China, multiple sources say. Many other Apple suppliers such as print circuit board and casing providers are closely monitoring where these major assemblers would shift their production.

The countries being considered for diversification include Mexico, India, Vietnam, Indonesia, and Malaysia, with India and Vietnam among the favorites for ‌iPhone‌ assembly, according to the report. Apple supplier Wistron already assembles a limited quantity of iPhones in India.

As part of the efforts, Apple reportedly has a so-called "capital expense studies team" tasked with negotiating with suppliers and governments.

While these plans are said to have been triggered by the trade war, the report claims that Apple has decided the risks of relying so heavily on manufacturing in China are "too great and even rising" even if the trade war is eventually resolved.

"A lower birthrate, higher labor costs and the risk of overly centralizing its production in one country. These adverse factors are not going anywhere," said one executive with knowledge of the situation. "With or without the final round of the $300 billion tariff, Apple is following the big trend [to diversify production]," giving itself more flexibility, the person added.

Apple currently relies on Chinese and Taiwanese companies for the vast majority of its manufacturing needs, so diversifying its supply chain would obviously take time. The report cites a source who believes it would take at least 18 months for production to begin in new locations.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Tags: China, Foxconn

Top Rated Comments

jdclifford Avatar
31 months ago
Sorry Donald, no US jobs. Trade imbalance with China will be transferred to other Asian countries instead. BRILLIANT! FINANCIAL GENIUS!
Score: 46 Votes (Like | Disagree)
yaxomoxay Avatar
31 months ago
Sorry Donald, no US jobs. Trade imbalance with China will be transferred to other Asian countries instead.
I see you fail to realize how good it is that China's trade will be fragmented into multiple Asian countries. This type of jobs will probably never come to the US (at least to a sizeable degree), but as long as there is not a single industrial superpower (=China at the moment) the US has only to gain from weakening it.
Score: 24 Votes (Like | Disagree)
Hirakata Avatar
31 months ago
Good. Diversifying in many aspects of life is a good thing, and business is obviously one of them.
Score: 23 Votes (Like | Disagree)
pweicks Avatar
31 months ago
Tariffs work.
Score: 18 Votes (Like | Disagree)
yaxomoxay Avatar
31 months ago

Trump isn’t threatening China so Apple can move manufacturing to Vietnam or Mexico.
It's not about Trump, it should've been done years ago. China was allowed to grow and cheat to unprecedented levels.
Score: 17 Votes (Like | Disagree)
Agit21 Avatar
31 months ago
This is good news. Apple wont be selling much devices anyway and don’t get me started on Chinas theft of IP.
Better move to other countries Tim.
Score: 12 Votes (Like | Disagree)

Top Stories

studio buds family

Beats Studio Buds Debuting Today With Active Noise Cancellation, Stemless Design, and More for $150

Monday June 14, 2021 8:00 am PDT by
We've seen a lot of teasers about the Beats Studio Buds over the past month since they first showed up in Apple's beta software updates, and today they're finally official. The Beats Studio Buds are available to order today in red, white, and black ahead of a June 24 ship date, and they're priced at $149.99. The Studio Buds are the first Beats-branded earbuds to truly compete with AirPods...
affinity designer contour tool

Serif Updates Affinity Photo, Designer, and Publisher With New Tools and Functions

Thursday February 4, 2021 1:58 am PST by
Serif today announced across-the-board updates for its popular suite of Affinity creative apps, including Affinity Photo, Affinity Designer, and the Apple award-winning Affinity Publisher for Mac, all of which were among the first professional creative suites to be optimized for Apple's new M1 chip. "After another year which saw record numbers of people switching to Affinity, it's exciting to...
maxresdefault

Craig Federighi and Greg Joswiak Discuss iPadOS 15, macOS Monterey, Privacy, Shortcuts on Mac, and More

Saturday June 12, 2021 6:12 am PDT by
As is tradition, Apple executives Craig Federighi and Greg Joswiak joined Daring Fireball's John Gruber in an episode of The Talk Show to discuss several announcements that Apple made over this weeks WWDC, including iPadOS 15, macOS Monterey, and a large focus around privacy. Federighi kicks off the conversation discussing the common architecture, now thanks to Apple silicon, across all of...
M1X MBP Feature

Leaker: Upcoming MacBook Pro to See Price Hike Over Current Model, Equal Performance Across 14 and 16-Inch Sizes

Tuesday August 24, 2021 5:28 am PDT by
The upcoming 14-inch MacBook Pro is set to be more expensive than the current 13-inch MacBook Pro and both the 14 and 16-inch models will offer the same performance, according to the leaker known as "Dylandkt." The leaker shared the information on Twitter, explaining that both of the upcoming MacBook Pro models, expected to come in 14 and 16-inch sizes, will feature the same performance due...
youtube apple tv

YouTube Discontinuing 3rd-Generation Apple TV App, AirPlay Still Available

Wednesday February 3, 2021 3:09 pm PST by
YouTube is planning to stop supporting its YouTube app on the third-generation Apple TV models, where YouTube has long been available as a channel option. A 9to5Mac reader received a message about the upcoming app discontinuation, which is set to take place in March.Starting early March, the YouTube app will no longer be available on Apple TV (3rd generation). You can still watch YouTube on...
General Apps Messages

Android iMessage Competitor Puts Pressure on Apple

Friday July 30, 2021 3:15 am PDT by
Google and the three major U.S. carriers, including Verizon, AT&T, and T-Mobile, will all support a new communications protocol on Android smartphones starting in 2022, a move that puts pressure on Apple to adopt a new cross-platform messaging standard and may present a challenge to iMessage. Verizon recently announced that it is planning to adopt Messages by Google as its default messaging...
YouTube Picture in Picture Feature

YouTube Premium Subscribers Can Now Use iOS Picture-in-Picture: Here's How

Wednesday August 25, 2021 3:55 am PDT by
Google has rolled out picture-in-picture support as an "experimental" feature for YouTube premium subscribers, allowing them to watch video in a small window when the app is closed. If you're a premium YouTube subscriber looking to try out picture-in-picture, follow these steps: Launch a web browser and sign into your YouTube account at YouTube.com. Navigate to www.youtube.com/new. Scroll...
iPhone 13 Dummy Thumbnail 2

Kuo: iPhone 13 to Feature LEO Satellite Communications to Make Calls and Texts Without Cellular Coverage

Sunday August 29, 2021 7:39 am PDT by
The iPhone 13 will feature low earth orbit (LEO) satellite communication connectivity to allow users to make calls and send messages in areas without 4G or 5G coverage, according to the reliable analyst Ming-Chi Kuo. In a note to investors, seen by MacRumors, Kuo explained that the iPhone 13 lineup will feature hardware that is able to connect to LEO satellites. If enabled with the relevant...
twitterqrcode

Twitter Introduces QR Codes for Sharing and Following Accounts

Wednesday November 16, 2016 4:13 pm PST by
Twitter today introduced Snapchat-style QR codes, which are designed to make it easier to find and follow friends on the social network. Each Twitter QR code is unique to an individual Twitter user, so when scanned, it'll bring up the person's account. To access your Twitter QR code, you'll need the official Twitter app for iOS. In the app, go to your profile, tap on the gear icon, and select...
macOS Monterey on MBP Feature

Apple Seeds Sixth Beta of macOS Monterey to Developers

Monday August 30, 2021 1:11 pm PDT by
Apple today seeded the sixth developer beta of macOS Monterey, the newest version of the macOS operating system. The sixth beta comes three weeks after Apple released the fifth macOS Monterey beta. Registered developers can download the beta through the Apple Developer Center and once the appropriate profile is installed, betas will be available through the Software Update mechanism in...