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Apple is considering making its watches and MacBooks in Vietnam instead of China

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Apple is reportedly considering manufacturing its Apple Watch and MacBook for the first time in Vietnam, in a move that would reduce the company’s reliance on China amid mounting international tensions.

Apple’s main suppliers of watches and laptops have begun test production in North Vietnam. Nikkei Asia They reported this on Tuesday based on people who were familiar with the case.

It follows weeks of escalated rhetoric from Beijing following Chairman Nancy Pelosi’s visit this month to Taiwan, the self-governed island China claims as its territory.

Apple, the largest company in the US, has long been dependent on Chinese factories. But according to the new report, Chinese supplier Luxshare Precision Industry and Taiwan-based Foxconn are investigating the new production lines in Vietnam.

In 2016, Apple struck a $275 billion deal with Chinese authorities — allowing the tech giant to grow most of its operations in the province while “contributing to the development of China’s economy and technological prowess through investment, business deals and employee training’.

Apple CEO Tim Cook is seen visiting a foreign supplier. The company is considering moving more production to Vietnam to reduce its dependence on China

Taiwan-based Foxconn is one of the suppliers exploring the new production lines in Vietnam

Taiwan-based Foxconn is one of the suppliers exploring the new production lines in Vietnam

While it’s unclear how much of the $275 billion contributed to product manufacturing and development, the 2016 deal proved just how much California-based Apple relied on China for its business.

The five-year deal, forged by CEO Tim Cook, is said to have expired last year, it said The information. It is unclear whether this new move to Vietnam is in response to the alleged end of the agreement.

An Apple spokesperson did not immediately respond to a request for comment from on Wednesday.

Apple started diversifying its production in Vietnam in 2020, when it started moving production of their highly popular AirPods there.

Since then, Apple has also expanded production of iPads in the Southeast Asian country.

The number of Apple suppliers with offices in Vietnam has increased from just 14 in 2018 to at least 22, according to Nikkei Asia.

Apple has also started manufacturing the iPhone 13 in India this year and plans to assemble iPad tablets in the region as well.

It marks a change in strategy for Apple, which has relied on factories in China for nearly all of its manufacturing needs for decades.

But iPhones — which are Apple’s most valuable products and have generated the most profit for the company since 2008 — are still primarily manufactured in China.

Employees work on the assembly line at Hon Hai Group's Foxconn factory in Shenzhen, China

Employees work on the assembly line at Hon Hai Group’s Foxconn factory in Shenzhen, China

In 2022 alone, more than 50 percent of Apple’s revenue was generated from iPhone sales.

But as time goes on, tensions between US authorities and an increasingly combative Beijing have only grown.

After Pelosi’s recent visit to Taiwan, China surrounded the island with military exercises and gave the US belligerent warnings not to interfere.

Beijing threatened retaliation and warned of Pelosi’s visit: “Those who play with fire will be burned.”

China considers the island a breakaway province to be forcibly annexed if necessary, and considers visits to Taiwan by foreign officials as an infringement of Chinese sovereignty.

On a Wednesday, Taiwan held its own military exercises, after days of Chinese missile strikes and raids into Taiwan’s seas and airspace by People’s Liberation Army ships and planes.

Pelosi is pictured above during her visit to Taiwan, walking next to Legislative Yuan Vice President Tsai Chi-chang

Pelosi is pictured above during her visit to Taiwan, walking next to Legislative Yuan Vice President Tsai Chi-chang

India, the world’s second largest smartphone market, along with countries such as Mexico and Vietnam, is becoming increasingly important for contract manufacturers supplying US brands as they seek to diversify production outside of China.

Last week, Taiwanese contract maker Foxconn issued a cautious outlook for the current quarter after publishing better-than-expected results, citing slowing demand for smartphones following a pandemic-fueled boom.

Like other global manufacturers, Foxconn – formally called Hon Hai Precision Industry Co Ltd – has faced a severe shortage of chips that is hurting production.

Supply chains have struggled as the bottlenecks of the pandemic persisted and the war in Ukraine further strained logistics channels.

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