Apple, Inc.'s next batch of electronic gadgets might be assembled in Vietnam, sources with knowledge of the plan said Friday.
The sources said Hon Hai Precision Industry Co., Ltd., trading as Foxconn Technology Group and better known as Foxconn, a Taiwan multinational electronics contract manufacturer with headquarters in Tucheng, New Taipei City, - and Apple's main contractor - is moving some MacBook and iPad production to Vietnam as part of the American company's diversification.
Apple is moving to reduce possible damage from a continuing trade dispute between China and the U.S. The factory in Vietnam's Bac Giang province will start production in June next year, the sources said.
Apple is Foxconn's main client. Foxconn produces 60% to 70% of Apple's flagship iPhones.
The decision follows reports of Apple boosting iPhone manufacturing capacity in India - with contractors such as Pegatron Corp. looking to build factories in Mexico.
Outgoing U.S. President Donald Trump is encouraging American companies to move production from China and is considering banning U.S. companies selling products in China. The U.S. claims China poses a national security risk.
China has imposed tariffs on U.S. goods in retaliation and has regulatory power over foreign businesses operating there.
Apple wants to make products in different countries. New prohibitions on imports and tariffs have made this a pressing issue, experts say. Several Taiwan manufacturers have moved their manufacturing to Vietnam, Mexico or India as a result of the frictions between China and the U.S.
In August, Foxconn chairperson Liu Young-way told employees, shareholders and creditors it would establish "two sets of supply chains" to serve both the China and America markets, The Independent reported.
Foxconn is considering setting aside up to $1 billion to expand an iPhone manufacturing facility in India as "strongly requested" by Apple, sources said.
