Over the past few years, Apple has moved some of its production away from China to India, Vietnam, etc. A new report from TF Securities analyst Ming-Chi Kuo details how the tech giant can continue to reduce its reliance on China.
Apple eventually plans to exclusively assemble MacBooks in Thailand
Apple, Google, and other tech companies have reportedly been trying to shift their production away from China to reduce their reliance on the country. There are numerous reasons for this including geopolitical tensions, unstable production, and an increase in labor costs.
In a series of tweets based on supply chain surveys, Kuo says that Apple’s supply chain management strategy “continues to change in response to the de-globalization trend,” in order to reduce its reliance on China and move some of its production to other regions.
Kuo’s predictions largely focus on the tech giant moving production away from China to India and Thailand. The Indian company Tata Group may work closely with Apple suppliers Pegatron or Wistron to develop iPhone assembly facilities in the region.
According to Apple’s plan, the Indian company Tata Group may cooperate with Pegatron or Wistron in the future to develop the iPhone assembly business. More than 80% of the iPhones made in India (by Foxconn) are currently to meet domestic demand.
The potential cooperation of Tata Group and Pegatron or Wistron can accelerate the increase in the proportion of non-China iPhone production.
As for MacBook production, Kuo says that the main production side for MacBooks in the future may be located in Thailand. As of right now, all MacBook models are assembled from production facilities in China.
Kuo says that within 3-5 years, the U.S. market, which accounts for 25-30% of global shipments, can be “supplied by assembly sites located in non-China to reduce potential impacts from political risks,” such as US-China tariffs.
In the long run, it is expected that the Chinese market will be supplied by assembly sites located in China whereas non-Chinese markets will be supplied by sites located in India, Thailand, etc.
Earlier this month, a report came out suggesting that it would take the Cupertino tech giant eight years to move just 10% of its production capacity outside of China, where almost 98% of its iPhones have been made.
