A trend in manufacturing companies diversifying their operations away from China has been accelerating, and now Apple suppliers are joining the exodus. Nguyen Xuan Quynh and John Boudreau report for Bloomberg, writing:
Apple Inc.’s Chinese suppliers are likely to move capacity out of the country far faster than many observers anticipate to pre-empt fallout from escalating Beijing-Washington tensions, according to one of the US company’s most important partners.
AirPods maker GoerTek Inc. is one of the many manufacturers exploring locations beyond its native China, which today cranks out the bulk of the world’s gadgets from iPhones to PlayStations. It’s investing an initial $280 million in a new Vietnam plant while considering an India expansion, Deputy Chairman Kazuyoshi Yoshinaga said in an interview. US tech companies in particular have been pushing hard for manufacturers like GoerTek to explore alternative locations, said the executive, who oversees GoerTek’s Vietnamese operations from northern Bac Ninh province.
“Starting from last month, so many people from the client side are visiting us almost every day,” Yoshinaga said from his offices at GoerTek’s sprawling industrial complex north of Hanoi. The topic that dominates discussions: “When can you move out?”
The expanding conflict between the US and China, which began with a trade war but has since expanded to encompass sweeping bans on the exchange of chips and capital, is spurring a rethink of the electronics industry’s decades-old supply chain. The world’s reliance on the Asian nation became starkly clear during the Covid Zero years, when Beijing’s restrictions choked off the supply of everything from phones to cars.
Apple’s suppliers rarely comment on its thinking, in part because of the US company’s famous insistence on secrecy across its global supply chain.
The iPhone maker has kept mum on whether it plans to diversify out of China, which would entail revamping a model Chief Executive Officer Tim Cook pioneered under Steve Jobs. The US giant has been careful to avoid suggestions it might reduce its investment in China, where it’s built an ecosystem centered on companies such as GoerTek and Foxconn Technology Group, which collectively employ millions.
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