Apple Wants To Move Production Out of China

By  |  June 24, 2019

Apple is getting concerned about the ongoing trade war between China and the U.S., and to avoid falling victim of the war, like Huawei, the California-based company has notified its suppliers (Foxconn, Pegatron and Wistron) to submit plans on moving between 15% and 30% of its productions outside of China.

Currently, the majority of Apple’s products are manufactured in China with the company’s low-cost iPhones being manufactured in India, with plans to start making the higher-end smartphones there as well.

Around 5 million jobs rely on Apple’s manufacturing in China, with 10,000 people directly employed by Apple. Apple plans on moving production from China to South East Asia countries like India and Vietnam. There is also the possibility of exploring other options like Mexico, Indonesia and Malaysia.

Apple’s largest manufacturer, Foxconn says that it has the capacity to move production from China when required to do so, however, other suppliers claim that moving production from China will be an uphill task that will take at least 18 months.

The suppliers described the process of moving as “painful and difficult” considering China has a large pool of skilled labour built around an ecosystem of component supplies and a supporting infrastructure that’s less prone to issues like power shortages.

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Apple’s plans to move production out of China come at a time when higher tariffs are about to hit devices such as phones, laptops and tablet manufactured in China. As Trump’s administration continues to purge on China, it seems like the Chinese are also taking a step to retaliate with citizens calling for iPhones boycott and the government mulling creating its own entity list.

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