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Apple requires suppliers to plan to move manufacturing outside of China

Foxconn facility

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Apple is speeding up moving part of its supply chain out of China, with supply chain partners warning that it plans to ramp up assembly operations in India and Vietnam.

China is Apple’s choice for production when it comes to many of its flagship products, but over the years it has rethought relying on the country more often. Although it has long planned to start spreading its production to other regions, Apple seems to be becoming more proactive about its intentions.

In a report on Saturday before Wall Street JournalSources involved in the discussions reported that Apple had “accelerated plans” to move some of its production elsewhere. He is now reportedly telling suppliers to “plan more actively” for assembly elsewhere in Asia, particularly India and Vietnam.

The letters also appear to mention a reduction in reliance on Foxconn Technology Group companies.

With lockdowns led by the government’s COVID-free policies, as well as riots at the troubled Zhengzhou factory of Foxconn, the largest maker of Pro-model iPhones, Apple needs to migrate away. The sentiment has been around for some time, but with China’s image as a manufacturing hub weakening in recent years, as has the US-China trade wars, Apple wants to try to work in other areas.

Doing so is a difficult prospect, one that was projected in September to take eight years to shift less than 10 percent of production out of China. It already has production centers being expanded in Vietnam and India, but more needs to be in place for larger shifts to be more effective.

One element is the new product introduction, a process in which Apple teams work with contractors to turn product blueprints and prototypes into a complete manufacturing plan. For China, with a heavy concentration of suppliers and production engineers, NPI is easy for Apple.

To build in other countries, Apple has to extend the NPI process for them. However, with hiring slowing and the global economy slowing, it is difficult for Apple to allocate workers to handle NPI with new suppliers in new countries, the sources claim.

Apple has a long-term goal of shipping 40% to 45% of its iPhones from India, up from the current level in the single digits. Meanwhile, Vietnam is expected to produce more other product ranges, such as AirPods, Apple Watch, and MacBook models.