Apple has moved some iPad production from China to Vietnam due to ongoing disruptions in the supply chain, according to a report. This is the first time that Cupertino has shifted manufacturing iPad models from China. One of the main reasons that Apple moved iPad manufacturing to Vietnam is to get around the restrictions that have emerged due to the strict COVID lockdowns in Shanghai and other cities in the country. However, the American tech giant also plans to reduce its dependence on China in general – due to the authoritarian government.
Citing people familiar with the development, Nikkei Asia reported that China’s BYD helped Apple build production lines in Vietnam. It is said that the contract manufacturer will soon start producing a small number of iPad models in the country.
As a result of the update, the iPad will become Apple’s second major product to be manufactured in the Southeast Asian country – after some AirPods models.
Apple is said to have asked its suppliers to develop additional supplies of components including printed circuit boards to avoid supply restrictions, especially for parts made in and around Shanghai as COVID-related restrictions are currently affecting business as usual.
The report said the company is asking its supply partners outside areas affected by the lockdown to help develop a two-month supply of components for all of its production lines.
It is also said that Apple has helped some suppliers cope with additional logistical costs to maintain adequate supplies.
Although Shanghai is gradually opening up, component suppliers in the city and Jiangsu Province expect it to take “at least two months” to restore their manufacturing capacity to normal.
Apple declined to comment on Nikkei Asia, although Gadgets 360 has reached out to the company to clarify the reported details. This article will be updated when the company responds.
For some time now, Apple has been looking to reduce its dependence on China and is planning to shift its production to the next potential market for which Vietnam appears to be the most suitable option.
The main reason Vietnam is Apple’s top pick over China is the easy access to labor and other resources to manufacture products including the iPad. However, due to very complex supply chains, the company may not be able to completely shift iPhone production to any market outside of China in the near future.
India is also said to be considering Apple, although it will be limited to iPhone manufacturing for some time.
TF Securities analyst Ming-Chi Kuo recently noted that Apple’s transfer of its production capacity to India involves “potential geopolitical risks”, which is not the case with Vietnam.
Along with Apple, Samsung has deep production-side integrations within Vietnam that have already helped the company reduce some supply hurdles to some extent.
Apple has so far dominated the tablet market globally, after Samsung. According to a recent report by IDC, the iPad captured 31.5 percent of the worldwide tablet market in the first quarter. On the other hand, Samsung retained its second position with 21.1 percent.