Apple Considers Shifting 15-30% of Production Capacity out of China
Apple is evaluating the option of moving 15 to 30% of its production capacity out of China, media outlet Nikkei Asian Review reported on Wednesday, June 19.
According to Nikkei, major suppliers of Apple have been asked to evaluate the cost of moving their production from China to Southeast Asia and other locations.
The decision was forced by the growing tensions between the U.S. and China amid the ongoing trade war.
Mexico, India, Vietnam, Indonesia, and Malaysia are among the countries being considered by Apple. Nikkei’s anonymous sources claimed that India and Vietnam are the company’s top choices for smartphone production diversification.
China has been serving as a manufacturing base for Apple in the past two decades, contributing to the tech giant’s global success. As per Nikkei, over 5 million Chinese jobs currently depend on Apple's logistics in the country.
In 2018, there were more Apple suppliers in China (41%) than in the U.S. (37%).
The so-called trade war between the U.S. and China started in 2018 when U.S. President Donald Trump first imposed extra tariffs on Chinese goods and announced more tariffs in the future. China responded by introducing its own sanctions.
This year, the U.S. administration added Chinese multinational tech company Huawei to a list of companies that are banned from supplying telecommunication gear to U.S. firms.