Nikkei Asian Review has learned, Apple has asked its major suppliers to estimate the cost suggestion of shifting 15% to 30% of its production capacity from China to Southeast Asia
As it prepares for a fundamental restructuring of its supply from them,
Multiple sources say The California-based tech giant’s request was triggered by the protracted trade tensions between Washington and Beijing,
That even if the spat is resolved there will be no turning back. Apple has decided on the risks of relying so heavily on manufacturing in that country.
As it has done for decades, are too great and even rising, several people told Nikkei.
The person added. Apple is following the big trend [to diversify production],” giving itself more flexibility.
Apple Suppliers In China
They have been the production base on which Apple’s global success has been built over the past two decades.
The country has not only been able to rally hundreds of thousands of skilled workers at short notice to fill rapidly rising orders as the company grew.
But an extensive and complex ecosystem of components, logistics, and talent have built up in and around Apple manufacturing sites.
Some 5 million Chinese jobs rely on Apple’s presence in the country, including those of more than 1.8 million software and iOS App developers, according to a study available on the company’s website.
According to sources familiar with the matter. The team of more than 30 people is discussing production plans with suppliers and negotiating with governments over financial incentives.
They might be willing to offer to attract Apple manufacturing, as well as regulations and the local business environment.
Multiple sources say. 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 the country,
Many other Apple suppliers such as print circuit board and casing providers are closely monitoring where these major assemblers would shift their production.
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The previous year, the number of mainland Chinese and Hong Kong-based suppliers surpassed those in the U.S.
and Japan for the first time, accounting for 41 of the top 200 suppliers, according to Nikkei research.
The countries being considered for diversification to include Mexico, India, Vietnam, Indonesia, and Malaysia.
India and Vietnam are among the favorites for smartphone diversification,
The people said, who asked for anonymity as the discussions are private.
It has not set a deadline for the suppliers to finalize their business proposals.
Both sides are working together to identify the most favorable incentives on offer and to review business environments outside of China.