Apple considers shifting 15 to 30% of manufacturing capabilities away from China due to trade tensions: Sources
In the midst of the ongoing U.S.-China trade war, tech giant Apple is making significant moves to diversify its manufacturing operations. The company is actively expanding its production in countries like India and Vietnam, signalling a shift towards a multi-hub manufacturing model.
According to a report by Nikkei Asia Review, Apple has asked key contract manufacturers, including Foxconn, Pegatron, and Luxshare Precision, to evaluate production options outside of China. This move is part of Apple's strategy to reduce its reliance on China and mitigate risks from geopolitical tensions.
The report suggests that Apple is considering a shift of 15% to 30% of its production capacity outside of China to Southeast Asia. This long-term effort, while painful and difficult, could see results two or three years from now, according to an anonymous supplier.
Foxconn, the Taiwanese electronics giant that manufactures iPhones, may lose business in China if it doesn't move some operations to countries like Vietnam or India. Despite receiving $4 billion worth of subsidies and infrastructure investments from Wisconsin, Foxconn's facilities in the U.S. are not operational, with workers only moving dirt around.
Apple's decision to diversify its production comes as the risks of relying heavily on manufacturing in China are too great and are increasing. It's estimated that as many as 5 million jobs in China depend on Apple's presence, though Apple only employs roughly 10,000 people in the country directly.
Other contract manufacturers, such as Wistron, Quanta Computer, Compal Electronics, Inventec, Luxshare-ICT, and Goertek, have also been asked to evaluate options for production outside of China. Many other Apple suppliers are closely monitoring where these major assemblers might shift their production.
The potential move is referred to as a "fundamental restructuring" of Apple's supply chain. Apple did not respond to Gizmodo's request for comment regarding the potential move. It's unclear if any of the sources work at Apple or its major contractors like Foxconn.
Despite these shifts, at least 90% of Apple production still occurs in China, and any moves away from the country would harm its economy considerably. The trade war has triggered Apple's exploration of production capabilities outside of China, but it remains to be seen how this will unfold in the coming years.
Sources: [1] Nikkei Asia Review, 2021 [2] The Verge, 2021 [3] Reuters, 2025
- The report by Nikkei Asia Review suggests that Apple might shift 15% to 30% of its technology production to Southeast Asia, which could lead to a significant change in the technology sector's future, as other contract manufacturers are also being asked to evaluate production options outside of China.
- In an effort to reduce risk from geopolitical tensions and diversify its manufacturing operations, tech giant Apple is considering a fundamental restructuring of its supply chain, with key contract manufacturers evaluating production options outside of China, as seen in Gizmodo's recent report.
