Apple said to ask suppliers, including Foxconn, to explore major shift out of China to Southeast Asia

Apple has asked its largest suppliers to consider the feasibility of shifting 15 to 30 per cent of its output from China to Southeast Asia in a dramatic shake-up of its production chain, the Nikkei reported.

The US tech giant asked “major suppliers” to evaluate the cost of such a migration, the newspaper cited multiple sources as saying. Those included iPhone assemblers Foxconn Technology Group, Pegatron and Wistron, MacBook maker Quanta Computer, iPad maker Compal Electronics and AirPods makers Inventec, Luxshare-ICT and GoerTek, Nikkei cited them as saying.

China is a crucial cog in Apple’s business, the origin of most of its iPhones and iPads as well as its largest international market. But President Donald Trump has threatened Beijing with new tariffs on about US$300 billion worth of Chinese goods, an act that would escalate tensions while levying a punitive tax on Apple’s most profitable product.

The company, however, has a backup plan if the US-China trade war gets out of hand: Primary manufacturing partner Hon Hai Precision Industry has said it has enough capacity to make all US-bound iPhones outside China if necessary, Bloomberg News reported last week. The Taiwanese contract manufacturer now makes most of the smartphones in the Chinese mainland and is the country’s largest private employer.