Apple is holding off on expanding production in Vietnam until workers' conditions improve, according to local news reports.
The reports indicate that Apple representatives visited Vietnam earlier this month to investigate existing Luxshare-ICT facilities. Luxshare-ICT has apparently not met Apple's welfare requirements yet, which include adequate dormitories and living conditions for workers. Luxshare-ICT has set out to improve the conditions to expand production for Apple.
"The Apple side continually surveyed the workshop of Luxshare-ICT Vietnam in Bac Giang on iPhone production conditions. Apple is impressed by the speed at which our facility is built here. At the same time, through practical research, Apple highly appreciates the potential in Bac Giang province and hard-working workers," said Tang Due Bang, Foreign Affairs Manager of Luxshare-ICT Vietnam.
Apple demands that manufacturers offer dormitories for workers near manufacturing plants. As Luxshare-ICT Vietnam cannot meet the huge demand for workers, the company has sought to hire workers from further afield. Apple is concerned that this would mean workers have to travel too far to work, and is therefore asking for more nearby dormitories to be built. Construction is waiting on permission from local government.
In May, AirPods Pro manufactured in Vietnam began circulating, and it has been widely rumored that Apple has already begun production of the upcoming AirPods Studio there. Luxshare hopes to expand to manufacture iPhones and Apple Watches in the region.
Major Apple manufacturing contractors Foxconn, Pegatron, and Compal Electronics are reported to be expanding production in Vietnam. Companies are increasingly reducing reliance on China and diversifying supply chains to prevent concentration risks. Vietnam is emerging as a major manufacturing and assembly hub for large technology companies, and Samsung manufactures as many as half of its smartphones there already.
