Apple now has at least 11 (partner) factories in Vietnam
This is the hugest pile of iPhones you can imagine — think how many hours of work and development it represents.
Pandemics and politics are driving companies to build diversity into their supply chains to protect against future shock. Apple now has eleven factories run by its Taiwanese partners in Vietnam, according to a local report.
Vietnam is an emerging manufacturing centre
The move to Vietnam is by no means confined to Apple, though many of the big names now setting up shop there are familiar to anyone watching the iPhone maker’s supply chain: Foxconn, Luxshare, Pegatron, Wistron – all four are expanding in the nation. Samsung is also there, planting a $220 million R&D center in Ha Noi.
Vietnam’s government is working to make the nation even more attractive to companies seeking to diversify, with some industry professionals seemingly lobbying the government to put policies into place to nurture thee moves.
The risk, of course, is that a fast-paced roll-out may not be sustainable, so there’s a need for corporate social responsibility and commitments to clean working conditions and environmental protection, the report says.
The need for sustainable practises
Do Thi Thuy Huong, Vice President of the Vietnam Association of Supporting Industries (VASI) toldVietnam Investment Review that Vietnam is well-placed to become an alternative production hub, but wants to see investments also made to nurture new businesses in the country.
[Also read: Apple diversifies as it prepares business for future shocks]
Vietnam’s Prime Minister Pham Minh Chinh visited Silicon Valley in May, where he met with Apple CEO, Tim Cook. The focus was on cooperation and trade, with the PM committing to helping US companies such as Apple set up shop in Vietnam.
Apple is already responsible for around 160,000 jobs in the nation, a report in Saigon Online explains.
Tim Cook thanked Vietnam for “Creating a favorable business environment for Apple’s operations.”
He also said the company wants to extend its supply chains in the country and involve capable domestic firms in Apple’s supply chains. Cook also said he would consider increasing the number of Vietnamese suppliers Apple used.
Apple currently assembles AirPods, iPads and HomePods in Vietnam.
International logistics
Diversification is taking place across the Apple supply chain.
As previously reported here, Apple’s main manufacturer, Hon Hai/Foxconn is also building a chip production facility in Malaysia. Most big manufacturers, including Apple chip manufacturer, TSMC, are building similar facilities.
Foxconn also recently reached an agreement to enter a joint venture with India’s Vedanta to manufacture semiconductors there. Apple and its manufacturing partners also seem keen to put some facilities in place in the U.S., mainly for sophisticated component production.
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