William Gallagher
Apple, Google, and others are having to delay or reduce plans to move manufacturing away from China, as the impact of the coronavirus makes governments increase border controls.
Partly because of US/China trade tensions, and partly to avoid over-reliance on one source, Apple and other firms have been steadily moving away from China. Now, however, new COVID outbreaks have affected international trade as governments attempt to contain new variants of the virus.
According to Nikkei Asia, tighter border controls and intermittent travel restrictions are affecting the plans of Apple, Google, Amazon, and component suppliers.
Reportedly, Apple's plans to mass produce AirPods and AirPods Pro in Vietnam have been been particularly affected. For now, they will continue to be produced in China, though unnamed sources say Apple still aims to move 20% of AirPods production to Vietnam at some point.
"[Vietnam's] engineering workforce is still far from adequate," a supply chain executive familiar with Apple and Google's plans, told Nikkei Asia. "With all the travel restrictions, it's only feasible to make products in Vietnam that are already in mass production elsewhere, rather than starting production of upcoming products from scratch in the country."
"[Border control] has been tightened in the past few months," a separate Amazon supplier manager said. "We could not easily dispatch our Chinese engineers to support our production projects for Amazon in northern Vietnam, so the company has been bringing in fully vaccinated Taiwanese engineers from China."
Reportedly, the Vietnamese government has also ordered factories to halt production, unless they can accommodate workers with sleeping facilities, or travel arrangements. Nikkei Asia says that Apple suppliers including Foxconn and Luxshare briefly suspended production over COVID measures.
The publication's same sources say that Apple has also put on hold its intention to bring some proportion of MacBook Pro and iPad production to Vietnam.
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11 Comments
Imagine that in 1945 GM produced most of its cars in Ukraine. That’s kind of the situation apple is in — deeply dependent on a county that is run by communist autocrats and is increasingly hostile to the US.
good luck with that apple!
Most of Vietnam has been in a 2 to 3 week lockdown since late July. It's going to be start-stop like this until enough of the population has been vaccinated, which will take a while. So no surprise that this or that activity scheduled to be done in the country has been postponed.