Apple is contemplating on shifting between 15% and 30% of its manufacturing outside of China. According to Nikkei, the fruit company has been going around asking prominent players and key suppliers like Foxconn, Pegatron, and Wistron for insight about opening a factory in another country.
Outside of China, Apple is almost undoubtedly spoilt for choice. What is surprising is that Malaysia is the brand’s list, followed by Mexico, India, Vietnam, and Indonesia. However, according to executives who are part of the talks, Apple has seemingly marked both India and Vietnam as potential favourites.
There are several reasons behind Apple’s decision, with the major – if not decisive – factor currently being the on-going trade war between the US and China. Last month, the US’ Trump administration signed an executive order against the Chinese economic powerhouse. However, the move has been viewed by many as a powerplay against the Chinese telecommunications company, Huawei.
It also doesn’t help that the US will be introducing and enforcing a 25% tariff on all phones, notebooks, and tablets made in China. Starting from the end of this month.
Another reason behind the Cupertino-based tech giant’s decision can be attributed to China’s own domestic economy. “A lower birthrate, higher labour costs and the risk of overly centralising its production in one country. These adverse factors are not going anywhere,” said one executive, who is also a part of the discussion. “With or without the final round of the US$300 billion (~RM1.24 trillion) tariffs, Apple is following a big trend to diversify production”.
At this stage, Apple still hasn’t set a deadline for the big move, as it’s still waiting on its suppliers’ advise over which country would be most ideal for its shift. Sadly, the brand also failed to specify how many jobs in its China outlet would be affected by the 15% to 30% shift.
(Source: Nikkei, The Verge // Image: Getty Images)
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