Apple Suppliers Racing to Exit China [Report]

The shift of production capacity out of China will happen faster than most anticipate as Apple suppliers race to exit the country, says AirPods manufacturer GoerTek Inc.

In an interview with Bloomberg, GoerTek Deputy Chairman Kazuyoshi Yoshinaga says the company is investing an initial $280 million in a new Vietnam plant and also considering an India expansion. Yoshinaga revealed U.S tech companies have been pushing hard for manufacturers to explore alternative locations for production.

"Starting from last month, so many people from the client side are visiting us almost every day," Yoshinaga said from his offices at GoerTek's sprawling industrial complex north of Hanoi. The topic that dominates discussions: "When can you move out?"


Yoshinaga says most Chinese tech manufacturers are experiencing the same pressure.

"I would say currently 90% of them, they're looking at that," he said. "It's the brand companies' decisions."

The trade conflict between the U.S. and China, as well as major supply issues caused by China's COVID restrictions, have made companies realize that solely depending on the country for production is a major risk. While Bloomberg estimates it will take Apple eight years to move 10% of production outside of China, GoerTek believes it will be far quicker.




Vietnam and India are at the top of list of potential locations for new factories. India offers both potential as future market and as a manufacturing base. Additionally, the country has a 'Make in India' program that incentivizes investment in the country.

"We get requests from our clients almost every month. 'Do you have any plans to expand to India?'" Yoshinaga said. "If they decide to build up the production lines in India, we may have to think about it seriously. Currently we are focusing on developing our Vietnam production facilities."

Apple has not been vocal about plans to move production from China; however, it has started producing the iPhone in India and has plans to acquire chips from TSMC's new factory in the United States. Notably, the National Legal and Policy Center (NLPC) is seeking to have Tim Cook removed from Apple's Board of Directors in part due to his overdependence on the country.

More details in the full report linked below...

Read More