A new report suggests Apple may be going through the process of shifting a big chunk of its manufacturing out of China.
Nikkei has the report this week. The publication states that Apple is currently considering moving between 15 and 30 percent of its manufacturing out of China. Apple has an internal team looking at options, and has reportedly already reached out to companies like Foxconn, Wistron, and Pegatron to evaluate available options as well.
The reason for the consideration appears to be the ongoing trade ware between the United States and China. It is expected that the U.S. will introduce another round of tariffs against China, this time up to 25 percent on devices that include phones, laptops, and tablets. But while that may be the catalyst, it appears that Apple is interested in moving a large portion of its manufacturing presence out of China, no matter what happens with the trade battle between the two nations.
A lower birthrate, higher labor costs and the risk of overly centralizing its production in one country. These adverse factors are not going anywhere,” said one executive with knowledge of the situation. “With or without the final round of the $300 billion tariff, Apple is following the big trend [to diversify production],” giving itself more flexibility, the person added
As for where this chunk of production will be heading, the report indicates that Apple is looking at South East Asia, in areas like Vietnam and India. Malaysia, Indonesia, and Mexico are also said to be under consideration as well.
It has been previously reported that Apple is considering moving MacBook and iPad production into Malaysia at some point in the near future.
Meanwhile, Foxconn has indicated in the past that it does have the capacity to move all of its U.S. iPhone production out of China.
The process is expected to be difficult for Apple. China has been building its manufacturing infrastructure for years, including the vast number of skilled workers, and it’s less likely than other areas to suffer from major setbacks along the way. And it will take time, too, with the report indicating it could take 18 months at the minimum. Results may not even start to appear for at least two to three years, either.
It looks like Apple has not set a deadline for suppliers to respond just yet.