Apple eyes India, Vietnam to replace China as its key manufacturer

walterbibikow · Jan 14, 2023

China, which is still the key Apple supplier, may lose its tag as leading iPhone manufacturer as Apple looks at India and Vietnam to bolster its supply chain, the media reported on Saturday.

Apple has reportedly cut back on orders citing weakening demand in potential blow to its Chinese suppliers amid Covid disruptions.

At the moment, China is way ahead on the Apple product manufacturing global map.
According to Bloomberg's analysis of Apple's global supply chain, 17.7 per cent of Apple's 2022 suppliers were domiciled in China, making the country the second largest global source of Apple's supply chain after the US.
India is in eighth spot, with 278 out of 12,248 global facilities (2.3 per cent).

Vietnam was in 14th place with 160 facilities (1.3 per cent).

Apple's suppliers are said to be planning to invest Rs 2,800 crore in Uttar Pradesh and have applied for land with the state's Yamuna Expressway Industrial Development Authority (YEIDA). YEIDA CEO Arun Vir Singh told news agency IANS that these companies have already deposited 10 per cent of the proposed allocation for land in Sector 29 under the Yamuna Authority near the upcoming Jewar airport in Greater Noida. Seiko Advance Limited, an ink manufacturing company and a supplier to Apple, has expressed interest in using 5 acres of land in Sector 29 of YEIDA for its operations and plans to invest Rs 850 crore in the project, providing employment to thousands of people. According to the report, sector 29, where the company has applied for the land, is well-developed with several available facilities for companies.

The Apple suppliers and a camera parts maker (Eizo Global) have reportedly proposed setting up a unit on approximately 23 acres of land with a proposed investment of Rs 1,200 crore.

Sunny Opotech, a subsidiary of China-based Sunny Optical Technology, has reached an agreement with Apple to construct a $300 million facility in India.

As per a report by Businessline, Welly Liu, President of Sunny Opotech India, the project will be implemented in stages until 2026, with the location of the facility yet to be determined, but a decision will be made in the near future. “It will cater to both mobile phones and laptops and computers of Apple."

Apple is eyeing to ramp up manufacturing in India amid Covid-related supply chain issues in China.

Apple is fast forwarding its manufacturing plans in India and Vietnam in the wake of unrest in China over zero-Covid policy which has severely disrupted its supply chain, leading to an acute shortage of new iPhone 14 Pro models last last year.

The Wall Street Journal had reported that the company is "telling its suppliers to plan more actively for assembling Apple products elsewhere in Asia, particularly in India and Vietnam" in order to "reduce dependence on Taiwanese assemblers led by Foxconn.

Apple aims to ship 40-45 per cent of iPhones from India compared to a single-digit percentage currently, according to Kuo.
Every fourth iPhone will be made in India by 2025, according to JP Morgan.

Buoyed by the ease-of-doing business and friendly local manufacturing policies, Apple's 'Make in India' iPhones will potentially account for close to 85 per cent of its total iPhone production for the country in 2022, according to industry experts.

Apple first started manufacturing iPhones in India in 2017, with iPhone SE.

The tech giant manufactures some of its most advanced iPhones in the country, including iPhone 11, iPhone 12 and iPhone 13 at the Foxconn facility, while iPhone SE and iPhone 12 are being assembled at the Wistron factory in the country.

Largest Apple supplier Foxconn has "quietly finalised plans" to relocate some of its Apple iPad and MacBook production to Vietnam, reports The South China Morning Post.