The splintering of the global tech supply chain spurred by an exodus from China that began during President Donald Trump’s first term looks set to persist regardless of who’s inaugurated as the president of the United States in January 2021.
Apple Inc., the largest of the many tech giants that rely on Chinese factories to make their gadgets, will move some production of its iPads and MacBooks to Vietnam. Key assembly partner Hon Hai Precision Industry Co., known also as Foxconn, has allocated $270 million in new investments to the Southeast Asian country. Those moves presage a larger and longer-term migration that may have ramifications for the iPhone maker as well as China’s role as workshop to the world.
Foxconn founder Terry Gou coined the term “G2” to describe the trend of a unified supply chain splitting into at least two. Company Chairman Young Liu said in August that the likes of India, Southeast Asia and the Americas could each in the future end up with a dedicated manufacturing ecosystem of their own. The trend now looks irreversible…
Apple, whose Chief Executive Officer Tim Cook orchestrated the creation of its current Chinese-centric production chain, has resisted a large-scale move but in recent years has increasingly explored alternatives… Back at home, the iPhone maker has been lobbying the U.S. government to support local chip production with tax breaks. Its key supplier Taiwan Semiconductor Manufacturing Co. is planning a chip fab in Arizona…
Trump’s tariffs on Chinese-made products have also forced other international companies to rethink their manufacturing operations. Nintendo Co. now has some of its Switch console production handled by Sharp Corp. in Malaysia, after it asked its main assembly partner Foxconn Technology Co. to offer geographic alternatives to its core China operations.
MacDailyNews Take: Apple came to this belatedly, but now seems to fully recognize the benefits of mitigating risk by spreading production around instead of concentrating it in a single socialist totalitarian country that’s well-known for stealing intellectual property, committing widespread human rights abuses, and seeding global pandemics, among other things.