Apple has asked Foxconn to move some iPad and MacBook assembly to Vietnam from China as the U.S. firm diversifies manufacturing to minimize the impact of a Sino-U.S. trade war.
The outgoing administration of U.S. President Donald Trump encourages U.S. firms to shift production out of China, Reuters reported.
During Trump’s tenure, United States has targeted made-in-China electronics for higher import tariffs, and restricted supplies of components produced using U.S. technology to Chinese firms it deems a national security risk.
Taiwanese manufacturers, wary of being caught up in the trade war, have moved or are considering moving some production from China to countries such as Vietnam, Mexico and India.
Foxconn is building assembly lines for Apple’s iPad tablet and MacBook laptop at its plant in Vietnam’s northeastern Bac Giang province, to come online in the first half of 2021.
Foxconn said in statement: “As a matter of company policy, and for reasons of commercial sensitivity, we do not comment on any aspect of our work for any customer or their products”.
Taiwan’s Foxconn on Tuesday announced a $270 million investment to set up a new subsidiary called FuKang Technology aimed at supporting the Vietnam expansion.
The contract manufacturer also plans to make television sets at the Vietnam plant for clients including Japan’s Sony, with the beginning of such production slated for late 2020 to early 2021.
The factory will also make other electronic products such as computer keyboards.
According to Taipei-based research group TrendForce, all iPads are assembled in China and so Foxconn’s move would mark the first time that the iPad has been made outside China.
Foxconn already plans to spend up to $1 billion expanding an iPhone assembly plant in India as strongly requested by Apple to diversify production beyond China.
Pegatron, one of the rivals of Foxconn, is considering building plants in Mexico as Washington promotes near-shoring production.
Other iPad assemblers include Taiwan’s Compal Electronics and China’s BYD Electronic International.