Vietnam gradually gains foothold in Apple’s supply chain

The media outlet stated that there are signs that China’s dominance in the Apple supply chain continues to face competition from countries such as Vietnam and India.

“Compal Electronics, a key manufacturer of the iPad and Apple Watch, said it secured land worth US$30 million in Vietnam to build a new plant to expand production capacity,” SCMP revealed.

It noted that the Taiwanese firm’s Vietnamese subsidiary had leased a 40-hectare plot in the Lien Ha Thai Industrial Park in Thai Binh province.

Compal is already producing Apple products in Vietnam’s Vinh Phuc province, in addition to its major production sites in China’s Chongqing and Jiangsu, as well as Thailand’s Phetchaburi, reported California-based firm the Cupertino.

According to SCMP, Apple’s supply chain is in the process of evolving as the company continues to diversify its sourcing and move to reduce its reliance on China-based factories amid growing geopolitical tensions between China and the US.

It quoted a report published by Taiwanese daily newspaper DigiTimes earlier this year, saying India is expected to assemble up to 50% of Apple’s iPhones by 2027, up from the current figure of fewer than 5% at present.

The newspaper also stressed that the forecast is even more extreme than JPMorgan’s earlier prediction that India would assemble 25% of total iPhones worldwide by 2025.

“Vietnam is expected to produce 20% of all iPads and Apple Watches, 5% of MacBooks and 65% of AirPods by 2025,” the report outlined.

SCMP also revealed that Apple has been adding new factories outside China over the past year. According to its latest supplier list, the number of production locations in India increased by 14 in the fiscal year of 2022 compared with 11 in 2021, while facilities in Thailand had grown from 22 in 2021 to 28 last year.

“The number of facilities in Vietnam remained unchanged during the period at 27,” it concluded.