[News] Tech Giants’ Supply Chain Reshuffle: from China to Southeast and South Asia

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China has long been the preferred location for tech companies to establish their supply chains. However, in recent years, the decline in population dividends has led to rising labor costs, and the need for tech companies to mitigate the impact of geopolitical risks has prompted them to accelerate the relocation of supply chains out of China, with some shifting production capacity to Southeast Asia and South Asia.

Recently, as per a report from TechNews citing sources, it’s indicated that HP is considering moving more than half of its personal computer production away from China to countries like Thailand and Vietnam.

This move is primarily aimed at significantly reducing its reliance on China’s supply chain, as well as addressing global trade dynamics and the need to lower costs.

In addition to HP, several well-known tech companies are also shifting their supply chains to Southeast Asian and South Asian countries.

• Apple

One notable example of supply chain relocation is Apple. Having long relied on China’s supply chain, Apple is now finding that the era of full dependence on China is coming to an end due to political and commercial pressures.

iPhone

As one of Apple’s most important products, iPhone has been a key focus in this shift.

Although supply chain diversification was always part of Apple’s strategy, the plan has been accelerated following a series of disruptions at Foxconn’s Zhengzhou plant during the pandemic. These events have compelled Apple to expedite its efforts to diversify its supply chain.

According to a report from Business Standard, since April of this year, Apple has assembled iPhones worth USD 14 billion in India, with 14% of iPhones now being manufactured there.

Rajeev Chandrasekhar, India’s former Union Minister of State for Electronics and Information Technology, also stated on the X platform that by 2028, it is estimated that up to 25% of iPhones will be made in India.

iPad

In addition to iPhone, Apple has also started shifting part of its iPad production to Vietnam. Foxconn is responsible for manufacturing iPads in Vietnam, where mass production and shipments are already underway.

MacBook

Similarly, the MacBook production line has been partially moved out of China and relocated to Vietnam, which is primarily produced by Quanta and Foxconn in their Vietnamese facilities.

Earlier rumors cited by Nikkei have suggested that Apple was considering shifting some of its production to Thailand as well. However, Thailand’s supply chain for key components is not yet fully developed, with many parts still reliant on imports from China.

The associated transportation costs and the risk of potential damage during transit have led Apple to prioritize setting up production lines in Vietnam first.

Nevertheless, Thailand’s strong electronics manufacturing infrastructure and cost advantages make it a potential future production site for Apple.