Apple’s supply chain in China evolves as Foxconn hires, Compal invests in Vietnam and MacBook production relocates to Thailand
- Experienced workers who have had more than two stints at Foxconn are being offered a bonus of 8,000 yuan to help with iPhone 15 production
- Compal Electronics, a key manufacturer of the iPad and Apple Watch, secured land worth US$30 million in Vietnam ‘to expand production capacity’
Apple’s extensive supply chain in China continues to undergo changes, as the world’s largest iPhone factory has started hiring for iPhone 15 production, a major contractor has set up a new plant in Vietnam, and some production of the MacBook is reportedly being relocated to Thailand.
Foxconn Zhengzhou, the world’s largest iPhone factory, has offered a one-time 7,500 yuan (US$1,050) bonus for workers who previously resigned to come back, as it prepares for production of new iPhone models that are expected to launch in September. For experienced workers who have had more than two stints at Foxconn, a bonus of 8,000 yuan is being offered, according to a job recruitment advertisement published by the Zhengzhou campus.
It is the highest bonus offered by the factory since production was disrupted by China’s draconian Covid-19 controls last November.
Foxconn chief plays down iPhone relocation talk in visit to Chengdu factory
Meanwhile, there are signs that China’s dominance in the Apple supply chain continues to face competition from countries like Vietnam and India. Compal Electronics, a key manufacturer of the iPad and Apple Watch, said it secured land worth US$30 million in Vietnam to build a new plant “to expand production capacity”.
The Taiwanese firm’s Vietnamese subsidiary leased a 40-hectare plot in the Lien Ha Thai Industrial Park in Thai Binh province, Compal said in a stock exchange filing last week. Compal is already producing Apple products in Vietnam, with factories in Vinh Phuc, on top of its major production sites in China’s Chongqing and Jiangsu as well as Thailand’s Phetchaburi, according to the latest supplier list of the Cupertino, California-based firm.
Separately, China may lose production of the MacBook laptop to Thailand for the first time, Taiwanese newspaper Economic Daily News reported last Wednesday, citing industry sources.
Radiant Opto-Electronics would be the backlight module supplier, while Quanta and Foxconn will assemble the newly released MacBook models in Thailand instead of China, which has been the exclusive production base for MacBook for years, the newspaper reported.
It followed reports in April that Apple was discussing with contractors the possibility of assembling and producing some parts and modules for its laptops in Thailand, according to a report by Nikkei Asia. Apple has already been producing its Apple Watch in Thailand for over a year, the report said.
Apple’s supply chain is evolving as the company continues to diversify its sourcing and reduce its reliance on China-based factories amid growing geopolitical tensions between the world’s two biggest economies.
The forecast is more aggressive than JPMorgan’s earlier prediction that India would assemble 25 per cent of total iPhones worldwide by 2025. Vietnam is expected to produce 20 per cent of all iPads and Apple Watches, 5 per cent of MacBooks and 65 per cent of AirPods by 2025, according to the report.
Apple has been adding new factories outside China in the past year. According to its latest supplier list, the number of production locations in India increased to 14 in the fiscal year of 2022 compared with 11 in 2021, while facilities in Thailand grew from 22 in 2021 to 28 last year.
The number of facilities in Vietnam remained unchanged during the period at 27.
