Apple requests its suppliers, Foxconn among them, to consider a move out of China. Destination: Southeast Asia
The US sanctions against China’s own Huawei will surely have serious consequences, and Apple is presumed to be the main potential target. However, the fact that the company’s production chain is firmly rooted in China may actually be beneficial. Apple has requested that its major suppliers deliberate a shift to 15-30% of their output to Southeast Asia, thus safeguarding themselves from potential damage.
Migration of a part of the production chain will be evaluated as to the expenditures by the companies in question, which include Quanta Computer (MacBook), Compal Electronics (iPads), Foxconn Technology Group (iPhone assembly), Inventec, Pegatron, GoerTek, and Luxshare-ICT.
Not only does Apple manufacture most of its iPhones and iPads in China, the country is also its largest international market. New tariffs on Chinese goods may be well underway, judging by the words of the US President, with approximately $300 billion worth of products affected. If these are, in fact, put in place, Beijing may very well impose sanctions of its own, taxing iPhones, the most popular product manufactured by Apple.
Apple does have a plan in place for a possibility of the US-China trade war taking on a yet more serious turn. Apple’s principal manufacturing partner Hon Hai Precision Industry claims that it has sufficient production capacity to make all the iPhones for the US market outside of China, should the need be. The Taiwan-based company is the main manufacturer of smartphones in mainland China and is currently its largest private employer.Source