iPad Production Slated To Move to Vietnam From China Due to Persisting Supply Chain Problems
In a somewhat forced move, some iPads will soon be manufactured in Vietnam. Supply chain issues have driven Apple to partly shift production to Vietnam. The ongoing covid-19 lockdowns in Shanghai and other regions of China have led to major disruptions and, combined with the company’s general desire to decrease its reliance on the authoritarian and rather unpredictable China, resulted in this move. China’s BYD assisted in setting up the construction lines in Vietnam, and the Vietnamese contractor is slated to begin production shortly – initially, a small share, to be expanded in the future.
Vietnam will now be manufacturing the second Apple product, after certain AirPods models were moved there in the past.
Apple suppliers outside the lockdown areas in China have received a request from the company to deliver additional components, i.e., printed circuit boards, in order to circumvent the supply issues it has been facing due to the restrictions in China that are impairing production. The US tech giant is also sharing the extra logistics costs with its suppliers.
While Shanghai restrictions are being slowly lifted, it will still most likely take several months to go back to pre-lockdown manufacturing levels.
Vietnam was selected due to the availability of potential personnel and other resources; however, iPhone manufacturing is not expected to be moved out of China in the near future due to the extremely complicated supply chain logistics.
India is another candidate for shifting production out of China, however, it is still unclear whether it is a realistic option due to potential geopolitical risks. Samsung is another manufacturer that has integrated its production with Vietnam, which was instrumental in resolving some of its supply problems.
Apple’s iPads currently have a 31.5% share in the global tablet market, while Samsung holds a 21.1% share.