Apple, Google, and others are having to delay or reduce plans to move manufacturing away from China, as the impact of the coronavirus makes governments increase border controls.
Apple and other companies have been moving away from China, partly due to tensions between the US and China and partly because they don’t want to rely too heavily on one source. As governments try to control new COVID variants, international trade has been affected by new COVID epidemics.
Nikkei Asia reports that tighter border controls are impacting the plans of Apple and Amazon as well as component suppliers.
Apple’s plans for mass production of AirPods Pro and AirPods Pro in Vietnam have been reportedly affected. They will be manufactured in China for now. However, unnamed sources claim that Apple still plans to shift 20% of AirPods production from Vietnam to some point.
“[Vietnam’s] engineering workforce [is still far from adequate,” said Nikkei Asia, a supply chain executive who is familiar with Apple’s and Google’s plans. With all the restrictions on travel, it is not possible to produce products in Vietnam that have been mass produced elsewhere. It is more feasible to start production of future products in Vietnam from scratch.
A separate Amazon supplier manager stated that “[Border Control] has been tightened over the past few months.” “We couldn’t easily dispatch our Chinese engineers in support of our production projects in Amazon’s northern Vietnam. So the company has been bringing in Taiwanese fully vaccinated engineers from China.”
According to reports, the Vietnamese government also ordered factories not to produce unless they could provide accommodation for workers or make travel arrangements. Nikkei Asia reports that Apple suppliers, including Foxconn or Luxshare, temporarily suspended production due to COVID measures.
According to the same sources, Apple also has put off its plans to send some of its MacBook Pro and iPad productions to Vietnam.