Apple Seeks to Expand Production Outside of China

Image Source: Visual China

BEIJING, May 23 (TMTPOST) — Apple has informed some of its contract manufacturers that it wishes to expand production in Southeast Asia to diversify its supply chain, according to a news report from the Wall Street Journal.

Apple has been producing a small proportion of its products in India and Vietnam. Sources said that the two countries are on top of the list for Apple when looking for new production bases.

Apple has not commented on the news report.

In April, when asked about Apple’s supply chain, the company’s CEO Tim Cook said that Apple’s supply chain is truly global and that the company’s products are produced across the globe. Apple is still working on plans to optimize its global supply chain, Cook added.

Cook told investors that Apple recognizes the supply chain challenges presented by the Covid-19 pandemic, chip shortage and the armed conflict between Russia and Ukraine.

The supply chain issue caused by the Covid-19 pandemic had had massive impact on Apple’s revenues, reducing the company’s ability to ship out new products. Apple estimated that from March to May the company had lost around US$4 billion to US$8 billion because of the disruption of supply chain.

Even before the Covid-19 outbreak in early 2020, Apple had already started seeking to diversify its development. The recent disruption of the supply chain further motivated Apple to diversify its supply chain and start looking for new production bases.

Apple is currently in talks with some existing suppliers on expanding production in India, sources said. It is said that the new production bases might also produce products for exporting. Statistics from market research firm Counterpoint show that India manufactured 3.1% of Apple’s iPhone, a figure that is expected to rise to around 6% to 7% this year.

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