14 DAY TRIAL // It’s not a secret that Apple wants to reduce its reliance on Chinese production operations, and the recent struggles that its suppliers in the country have been struggling with convinced the company to accelerate the efforts on this front.
This is why Apple is reportedly working as we speak on expanding the production power overseas, with research firm TrendForce revealing that up to 35 percent of the production capacity will end up taking place in Vietnam in India if Apple wants to meet the sales demand in North American using non-Chinese sites.
“Because of the growing concern about geopolitical tensions, Apple intends to significantly expand the number overseas production sites that are outside China. For 2023, Apple aims to double its device production capacity in India and have factories in Vietnam start making contributions by the middle of the year,” TrendForce explains.
The Chinese labor shortage could get even worse
“In view of the escalating trade dispute between China and the US, Apple will be compelled to rely only on production sites outside China to meet the sales demand of the North American market. In order to realize this, TrendForce believes that at least 30~35% of Apple’s entire device production capacity will have to be located in Vietnam and India. Therefore, Apple will need to keep raising the share of device production based in these two countries over the next several years.”
One of the challenges the Chinese suppliers are forced to deal with is the labor shortage encountered after the government lifted some of the restrictions.
“There are also signs that the labor shortage could get worse. Hence, on top of the various headwinds that are affecting the global economy, Apple is again facing a lack of manpower that constrains its device production,” TrendForce explains.