Apple Shifting iPad Production From China to Vietnam Amid Supply Chain Issues: Report

China's BYD is said to soon start producing a small number of iPad models in the country.

By Jagmeet Singh | Updated: 1 June 2022 17:37 IST

Apple Shifting iPad Production From China to Vietnam Amid Supply Chain Issues: Report

Photo Credit: Apple

iPad models may soon be made in Vietnam

Highlights

Apple is reportedly planning to shift some iPad production to Vietnam
BYD is said to have helped Apple build production lines in the country
Vietnam already has some contribution in AirPods production

Apple is moving some iPad production from China to Vietnam due to ongoing supply chain disruptions, according to a report. This is the first time that the Cupertino company is shifting the manufacturing of its iPad models out of China. One of the major reasons for Apple to move its iPad manufacturing to Vietnam is to overcome the restrictions that emerged due to strict COVID lockdowns in Shanghai and other cities of the country. However, the US tech giant is also in plans to reduce its reliance on China in general — due to the authoritarian government.

Citing people familiar with the development, Nikkei Asia reports that China's BYD helped Apple build production lines in Vietnam. The contract manufacturer is said to soon start producing a small number of iPad models in the country.

As a result of the update, the iPad will become the second major product by Apple to be manufactured in the Southeast Asian country — following some AirPods models.

Apple is said to have asked its suppliers to develop additional supplies of components including printed circuit boards to avoid supply constraints, especially for the parts that are made in and around Shanghai where COVID-related restrictions are currently impacting usual business.

The company is asking its supply partners outside the lockdown-affected areas to help develop component supplies for a couple of months for all its product lines, the report said.

Apple is also said to have helped some suppliers to meet with the additional logistics costs to maintain adequate supplies.

Although Shanghai is gradually opening up, component suppliers in the city and Jiangsu Province are expecting to take "at least a couple of months" to get their manufacturing capacity return to normal.

Apple declined to comment to Nikkei Asia, though Gadgets 360 reached out to the company for clarity on the reported details. This article will be updated when the company responds.

For some time, Apple is looking to reduce its dependency on China and is planning to shift its production to the next possible market for which Vietnam seems to be the most appropriate choice.

The primary reason for Vietnam being Apple's top-most selection over China is the ease of getting labour and other resources for manufacturing products including the iPad. However, due to very complex input supply chains, the company may not be able to shift its entire iPhone production to any market outside China in the coming future.

India is also said to be in consideration for Apple, though it would be limited for manufacturing the iPhone for some time.

TF Securities Analyst Ming-Chi Kuo recently pointed out that Apple's move its production capacity to India involves "potential geopolitical risks," which is not the case with Vietnam.

Alongside Apple, Samsung has deep production-side integrations within Vietnam that have already helped the company limit some of its supply hurdles to some extent.

Apple has so far dominated the tablet market globally, following Samsung. According to a recent report by IDC, the iPad captured 31.5 percent of the tablet market worldwide in the first quarter. Samsung, on the other hand, retained its second position, with a share of 21.1 percent.

Will the 2022 iPhone SE sink or swim? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

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