Apple Asks Foxconn to Move Some MacBook and iPad Production From China to Vietnam

[MacRumors]

Apple has asked Foxconn to move some of its iPad and MacBook assembly from China to Vietnam in an effort to minimize the impact of ongoing trade tensions between the U.S. and China, according to sources cited by Reuters.

Foxconn is building assembly lines for Apple's iPad tablet and MacBook laptop at its plant in Vietnam's northeastern Bac Giang province, to come online in the first half of 2021, the person said, declining to be identified as the plan was private.

The lines will also take some production from China, the person said, without elaborating how much production would shift.

"The move was requested by Apple," the person said. "It wants to diversify production following the trade war."

Apple has been seeking to add geographic diversity to its supply chain for some time now, and Apple suppliers already assemble the company's AirPods and AirPods Pro in Vietnam.

Apple is also reportedly seeking to expand iPhone production in Vietnam, although a report in August suggested the company was holding off until workers' conditions improve at supplier Luxshare-ICT's facilities.

Major Apple manufacturing contractors Foxconn, Pegatron, and Compal Electronics are all said to be expanding production in Vietnam as companies seek to reduce reliance on China and diversify supply chains to prevent concentration risks.

Vietnam is emerging as a major manufacturing and assembly hub for large technology companies, and Samsung manufactures as many as half of its smartphones there already.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Apple Asks Foxconn to Move Some MacBook and iPad Production From China to Vietnam

 

[Maximara]

I got a better idea. How about moving the assembly to the United States and the upper mangers all take a slight pay cut to pay for it?

 

[centauratlas]

Geographic diversity makes sense both from a shareholder and purchaser perspective. Dependence on factories in one single location is the height of stupidity and shortsightedness.


“I look to a day when people will not be judged by the color of their skin, but by the content of their character.” -MLK

 

[Reason077]

“I look to a day when people will not be judged by the color of their skin, but by the content of their character.” -MLK

And in Foxconn's case, their sharp eyesight and dexterity of their young fingers!

 

[GadgetBen]

Hopefully, Apple won't have a problem in China come January...

 

[R.Patrick]

Hmm.... What about moving the assembly to the US?

 

[Apple_Robert]

Hmm.... What about moving the assembly to the US?

I would like to see that happen. It would probably mean a price increase on affected products. I am not sure a lot of people would go for that, though.

 

[djgamble]

Makes sense... while it's from one communist dictatorship to another, IMO investing in other countries will only lead to good things.

Once Vietnam and India and stuff have the same manufacturing capabilities as China it'll be game on. Customers will benefit.

 

[newyorksole]

I’m really curious what a day in the life of an Apple supply chain exec is like. Based in California and coordinating with factories/teams around the world. Especially with Apple’s standards and innovations Lol seems so complex.

But either way, diversification is great.

 

[Guacamole]

all companies should move out from china

 

[Dwalls90]

I got a better idea. How about moving the assembly to the United States and the upper mangers all take a slight pay cut to pay for it?

That’s not how capitalism works.

 

[Maximara]

That’s not how capitalism works.

Actually per overly idealistic cartoons like Yankee Dood It (1856) that is exactly how Capitalism is supposed to work.

Elmer Fudd as King of the Elves: A manufacturer who sticks to old equipment cannot compete, and must fail. To survive, he must persuade people to risk savings in his business. He can then buy new equipment, increase production, and show a profit.

Shoemaker: And he keeps the profit.

Elmer Fudd as King of the Elves: Oh no, that's what a lot of people think. But he doesn't. Out of profit, he must pay dividends to investors. Profit must be put back into the business to fund newer and better machinery.

Shoemaker: Spend his profit on machinery? When does it all end?

Elmer Fudd as King of the Elves: It never ends! Constant replacement with the latest machinery makes the industry more efficient, thus enabling it to pay higher wages and still make a profit. This efficient operation also results in more goods, a better quality, and produces them at a lower cost to everyone!

Did I mention it was overly idealistic?

 

[az431]

I got a better idea. How about moving the assembly to the United States and the upper mangers all take a slight pay cut to pay for it?

it’s not purely a money issue. Apple’s suppliers overseas employ over a million people collectively. There simply aren’t enough people with the necessary skills here in the US. Amazon has a hard time filling a fraction of that number of positions for their warehouses, and most of them are barely capable of sticking items in boxes.

 

[az431]

all companies should move out from china

Why?

 

[Hammerd]

I don’t know what the chef is cooking but it looks appetizing!

 

[coredev]

I got a better idea. How about moving the assembly to the United States and the upper mangers all take a slight pay cut to pay for it?

That's not gonna work. Apple builds hundreds of millions of devices each year. So for every single cent increase of production costs you had to reduce management pay by a couple of millions.
The only way that additional cost could be offset is slimmer margins (stock holders would not like that) or higher prices (customers would not like that).
Just face it, assembly lines are not coming back to the US for mass market devices.

 

[Dwalls90]

Actually per overly idealistic cartoons like Yankee Dood It (1856) that is exactly how Capitalism is supposed to work.

Elmer Fudd as King of the Elves: A manufacturer who sticks to old equipment cannot compete, and must fail. To survive, he must persuade people to risk savings in his business. He can then buy new equipment, increase production, and show a profit.

Shoemaker: And he keeps the profit.

Elmer Fudd as King of the Elves: Oh no, that's what a lot of people think. But he doesn't. Out of profit, he must pay dividends to investors. Profit must be put back into the business to fund newer and better machinery.

Shoemaker: Spend his profit on machinery? When does it all end?

Elmer Fudd as King of the Elves: It never ends! Constant replacement with the latest machinery makes the industry more efficient, thus enabling it to pay higher wages and still make a profit. This efficient operation also results in more goods, a better quality, and produces them at a lower cost to everyone!

Did I mention it was overly idealistic?

I can’t tell if you’re being sarcastic or not.

Assuming you’re not, it seems you’re trying to suggest that moving production to the US would allow for maximized profits. The cost of labor is higher in the US, so without changing prices, I fail to see how that works.

Additionally, while there are some goods cheaply manufactured in China, all things held equal, there is no verifiable study showing US manufacturing of the same item would yield higher quality. American exceptionalism has trained citizens that “Made in America” means better quality, but that’s not guaranteed.

Being an American, I’m certainly for America first. But I also studied economics and know well enough that bringing manufacturing back to America wouldn’t allow for our economy to be the most competitive possible on an international stage.

 

[coredev]

I would like to see [moving the assembly to the US] happen. It would probably mean a price increase on affected products. I am not sure a lot of people would go for that, though.

Not sure if the MacPro is still assembled in the US. If it still is, look at the prices that some consider absurdly high. That would happen to iPhones and iPads as well. Not to mention the lack of qualified workers that @az431 correctly mentioned above.

 

[ArPe]

Great news, move all of it out of China as possible. I think we agree that China has great culture and contributions to the world but that oligarch spyware organ harvesting regime is one fat echo chamber of stupidity. Shame, it would be so easy for China to be like Japan or Taiwan.

 

[CarlJ]

I got a better idea. How about moving the assembly to the United States and the upper mangers all take a slight pay cut to pay for it?

It’s not that simple. There’s no city or county here with a spare 20,000 workers skilled in electronics assembly. It’d be a positively enormous task of hiring, training, and relocating a suitable workforce, so they're all within range of the factory. You’d probably have to build housing, or rapid transit, to get them all to the factory every day. Prices would go up, sure (it’s not something that that “slight pay cut” is going to cover), but it’s the availability of the labor force that’s the problem.

People who say, “just move/put the factories in the US” generally don’t realize just how vast some of these factory complexes are, like cities unto themselves.

What will probably happen, eventually, is Apple will bring a lot of manufacturing to the US, but it’ll be highly automated - robots doing all the repetitive work, with a small workforce of humans with highly specific technical skills there to monitor and maintain the robots and machines.

 

[GuruZac]

The more Apple gets away from China, the better. Everyone needs to pull out of China as much as they can.

 

[fenderbass146]

Why?

Because they are an authoritarian country who has millions of people in concentration camps, is trying to kill democracy in Hong Kong and Taiwan, continues to be aggressive militarily in South China Sea, has dangerous viruses coming out of their country regularly including covid. The government of China is trash and until they shape up business should cut ties

 

[coredev]

Because they are an authoritarian country who has millions of people in concentration camps, is trying to kill democracy in Hong Kong and Taiwan, continues to be aggressive militarily in South China Sea, has dangerous viruses coming out of their country regularly including covid. The government of China is trash and until they shape up business should cut ties

Wow, all this is may be true, but does it stop you from buying products made in China?

 

[waveman]

all companies should move out from china

... and make production more expensive? No no, the whole idea is to make THE iPhone expensive, not production. Production costs have to be reduced to the minimum, so eventually, if there is a way to exploit Vietnam and the young hands there, Cook will do it. Profit Profit Profit - above all!

 

[hugodrax]

Cost of labor is significantly cheaper in Vietnam, thats really the reason for moving there.