Apple iPhone Production ‘Shifting To India, Vietnam’
Key Apple supplier Foxconn accelerates production shift to India, Vietnam, Brazil amidst supply chain disruption in China
Key Apple supplier Foxconn may move as much as 30 percent of its manufacturing capacity out of China to India, Vietnam and Brazil as it and other electronics manufacturers seek to diversify and limit supply chain disruption caused by geopolitical tensions and public health challenges.
Counterpoint Research analysts Ivan Lam and Shenghao Bai said Foxconn began the multiyear diversification effort before the Covid-19 pandemic, with India emerging as an attractive manufacturing base due to its large population and high birth rate.
Vietnam offers lower labor costs than China, and now has 21 Apple suppliers operating in the country, although it can’t yet produce the iPhone.
“Led by Foxconn and Pegatron, companies have already invested in factories, production lines, relatively advanced manufacturing processes, and personnel training in India,” the analysts wrote.
India expansion
Counterpoint found found smartphones manufactured in India grew 16 percent in the second quarter of this year, reaching more than 44 million units.
Apple has contributed to the shift by making the iPhone 14 and iPhone 14 Plus models more modular and transferable across facilities, Counterpoint said.
The company has focused increasingly on ease of maintenance and deployment of new product assembly capacity, the firm said.
Due to the more modular design it is now “possible for the plants in India to produce the iPhone 14 almost simultaneously with the plants in China,” the analysts wrote.
Diversification
In September Apple said it it had begun manufacturing its current-model iPhones in India for the first time.
Earlier this month Taiwan’s Foxconn said it has invested a further $500 million (£411m) into its India business as it expands outside of its central focus on mainland China.
The move follows disruption at its biggest iPhone production plant in Zhengzhou, which normally employs employs some 300,000 people at this time of year to cope with holiday demand, but has seen production plummet due to the depature of tens of thousands of staff and protests that turned violent.
