Apple is moving more production to Vietnam to beat supply chain woes

Apple is moving more production to Vietnam to beat supply chain woes
FILE PHOTO: An Apple logo hangs above the entrance to the Apple store on 5th Avenue in the Manhattan borough of New York City, July 21, 2015. REUTERS/Mike Segar/File Photo

When the US and China started having their problems, which worsened under the Trump administration, companies accelerated diversification efforts of their supply chain operations to essentially ensure business remained as usual and that politics didn’t make shipping to us modern consumers difficult.

But with China sticking firmly to its COVID-zero policy and Shanghai only earlier this week moving toward reopening, Nikkei Asia said on Wednesday that Apple will be moving some of its iPad production to Vietnam because lockdowns were creating product and component shortages. Apple already has the Southeast Asian nation producing some of its Airpods and apparently asked Foxconn to move iPad and MacBook Pro production from China to Vietnam two years ago.

With this move, the hope is that iPad’s revenue will pick back up after being the only segment of Apple that saw a drop.

Key comments:

Apple CEO Tim Cook said in April that the iPad business was facing “very significant supply constraints” during the year’s first quarter.CEO Tim Cook visited Vietnam in May to meet with Prime Minister Pham Minh Chinh, where multiple reports say that Chinh told Cook the Vietnamese government was committed “to creating a fair, transparent and market-based business environment to help US firms and investors gain ground in Vietnam."

Vietnamese news outlet SGGP reported that Prime Minister Chinh “requested the corporation continue to step up its business activities in Vietnam and introduce its products to a wide range of customers” and that “he hoped the country would soon become Apple’s model market in Asia.”