Apple explores moving 15-30% of production capacity from China

Apple explores moving 15-30% of production capacity from China

Apple explores moving 15-30% of production capacity from China

Multiple sources told Nikkei that the trade war is what triggered the request, but there won't be any turning back even after a deal between the USA and China is made.

The iPhone maker has decided the risks of depending heavily on manufacturing in China are too great and even rising, it said.

Apple gets almost a fifth of its revenue from Greater China, and it's widely seen as a potential retaliatory target after the USA slapped restrictions on Chinese telecom giant, Huawei. And all of Apple's key suppliers, including Foxconn, Pegatron, and Wistron (iPhone); Quanta (MacBook); Compal Electronics (iPad); and Inventec, Luxshare-ICT, and Goertek (AirPods) have been asked to evaluate expanding into other countries.

The other countries being considered for diversification, amid protracted trade tensions between Washington and Beijing, include Vietnam and Indonesia, according to the report. India and Vietnam are among the favorites for smartphones, Nikkei said, citing sources who did not want to be identified as the discussions are private. Apple posted comments on a government website saying that taxing the iPhone, iPad and the Mac will reduce the company's contributions to the US economy.

"The proposed tariff list covers all of Apple's major products, including iPhone, iPad, Mac, AirPods, and AppleTV, as well as the parts and batteries used to fix products in the United States", the company said.

"The company is starting to think beyond the iPhone. iPhones are still popular, but they're not the sole basis of Apple's business". The company got almost 18% of its total revenue from Greater China in the quarter ended March. -China trade war gets out of hand: Primary manufacturing partner Hon Hai Precision Industry Co. has said it has enough capacity to make all US -bound iPhones outside of China if necessary, Bloomberg News reported last week.

Outside of China, Apple is nearly undoubtedly spoilt for choice.

According to Japan's Nikkei Asian Review on Wednesday, the tech giant has asked its major suppliers to assess the cost implications of moving 15 to 30 percent of their production capacity from China to Southeast Asia. Lower sales due to the import tax would force Apple to reduce the size of this injection into the US economy.

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