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Apple increases iPad production in large quantities outside China


Apple is stepping up production of iPads, iPhones, Macs, and other products outside China, indicating that the tech giant continues to accelerate production diversification despite hopes of easing tensions between the United States and China under President Joe Biden.

"IPad production begins in Vietnam in the middle of this year, the first time the world's largest tablet maker has built a large number of devices outside China," the sources told The Nikkei Asian Review.

The California tech giant is also stepping up production for the iPhone in India, the second-largest production base for the device, with plans to start production of the latest iPhone 12 series there as early as this quarter, the sources added.

Apple is also increasing the production capacity of smart speakers, earphones, and computers in Southeast Asia as part of its ongoing diversification strategy.

Apple is mobilizing suppliers in Vietnam to expand the production capacity of the latest HomePod mini, the device has been produced in Vietnam since its launch last year, and Apple has increased domestic production of its audio-related products, including various AirPods.

Apple has moved some Mac mini production to Malaysia, and part of MacBook production is also scheduled to be transferred to Vietnam this year, and most of its pc production is still in China.

Apple and many other technology companies want production capabilities outside China, and this has not slowed down despite a new U.S. president.

Apple aims to build capacity in new locations — mostly Southeast Asian countries — for many core products, such as iPad, iPhone, MacBooks, AirPods, and more.

The tech giants are moving to reduce their dependence on China, as rising labor costs there, prolonged trade tensions with Washington, and supply chain disruptions caused by the CORONA virus have raised the risk of relying heavily on one country. 

Moreover, the U.S. government has begun a process of restructuring the supply chain and has urged technology suppliers to move away from China, which remains a major industrial hub for major technology companies and boasts the world's most sophisticated and comprehensive supply chain.

Apple's decision to move such a wide range of products abroad indicates that problems between the two countries are likely to persist until 2021.

China's Goertek, a major AirPods assembly company, asked all its suppliers to assess the feasibility of moving production to Vietnam in late 2018 and was apple's first supplier to confirm a production transfer plan.

In 2019 Apple asked several suppliers to study the cost implications of transporting between 15 and 30 percent of production outside China for a wide range of production lines.

The AirPods series first entered experimental production in Vietnam in the summer of 2019, with mass production in 2020.

Part of the production of AirPods Pro, AirPods Max, and HomePod mini was dedicated to Vietnam last year, and Apple started making the iPhone 11 in India in 2020.