China, which is still Apple’s main supplier, could lose its label as a leading iPhone manufacturer if Apple looks to India and Vietnam to bolster its supply chain, media reported Saturday.
The largest Apple supplier Foxconn has “quietly finalized plans” to move some of its Apple iPad and MacBook production to Vietnam, the company reports. South China Morning Mail.
Apple has reportedly cut back on orders, citing weakening demand as a possible blow to its Chinese suppliers amid Covid disruptions.
At the moment, China is way ahead on the world map of the production of Apple products.
According to from Bloomberg analysis of Apple’s global supply chain, 121 (17.7 percent) of Apple’s suppliers were based in China by 2022, making the country the second largest global source of Apple’s supply chain after the US.
India ranks eighth, with two companies (0.3 percent) and 278 of 12,248 establishments worldwide (2.3 percent).
Vietnam ranks 14th with two companies (0.3 percent) and 160 establishments (1.3 percent).
Apple plans to ramp up production in India amid Covid-related supply chain issues in China.
Apple is accelerating its production plans in India and Vietnam in the wake of China’s unrest over its zero-Covid policy, which has severely disrupted its supply chain, leading to an acute shortage of new iPhone 14 Pro models last year.
The Wall Street Journal had reported that the company is “telling its suppliers to more actively plan to assemble Apple products elsewhere in Asia, particularly in India and Vietnam” to “reduce dependence on Taiwanese assemblers led by Foxconn” .
According to Kuo, Apple aims to ship 40-45 percent of iPhones from India, compared to a single-digit percentage currently.
According to JPMorgan, every fourth iPhone will be made in India by 2025.
Buoyed by the ease of doing business and friendly local manufacturing policies, Apple’s “Make in India” iPhones may account for nearly 85 percent of total iPhone production for the country by 2022, according to industry experts.
Apple first started manufacturing iPhones in India in 2017 with the iPhone SE.
The tech giant produces some of its most advanced iPhones in the country, including iPhone 11, iPhone 12 and iPhone 13 at the Foxconn factory, while iPhone SE and iPhone 12 are assembled at the country’s Wistron factory.