Apple is reportedly in discussions with suppliers to establish new manufacturing facilities in Thailand to produce Macbooks. This decision is in line with Apple’s strategy to gradually reduce its dependence on China and increase its footprint in other Asian nations, given the ongoing trade conflict between the US and China.
This news originates from Thailand’s suppliers, who are currently collaborating with Apple to manufacture the Apple Watch. The suppliers who are in discussions with Apple already possess established manufacturing facilities in Thailand that are utilized by other brands. They are currently in talks with Apple to establish a distinct assembly and production line in their factories to manufacture Macbooks.
According to some suppliers, they have begun constructing production facilities in Thailand for Apple’s MacBook, with an expected completion date by the end of this year. Initially, Apple had requested the establishment of new factories in Vietnam, but these suppliers proposed using existing spaces in Thailand instead. One of the suppliers stated that although Apple had approached them regarding setting up a plant in Vietnam, they presented a better alternative of utilizing their extensive space and production capabilities in Thailand.
The suppliers further stated that though MacBook assemblies happen in Vietnam, some of the components could be supplied from the Thailand plant. Also, suppliers have assured Apple the logistics and customs clearance would take no more than three days.
Why choose Thailand?
Apple is planning to move away from China to avoid the pressure from the ongoing US-China trade sanctions. The company is planning to set up Vietnam as its base in Asia and is already producing iPads and Airpods in the country.
However, Thailand also looks like a plausible choice as the country offers a highly competitive manufacturing market with abundant raw materials, low-cost labor, and innovative technologies.
Moreover, the Thai government also encourages the manufacturing sector as it accounts for the majority of Thailand’s total exports and generates a large volume of jobs, amounting to almost six million workers in 2021 alone. As of the fourth quarter of 2021, the share of the manufacturing sector in the Thai economic contribution was 34%, preceding other major industries like service and trade.
Why are brands leaving China?
During the 1990s, when globalization became popular countries across the world started offshoring their manufacturing and service industries to nations that offered low-cost and cheap labor and resources. China topped the list of offshore nations and blossomed into a global manufacturing hub as it presented the perfect blend of a skilled labor force and a prospering middle class interested in purchasing Western products, making it an ideal choice for both manufacturing and marketing.
However, due to the US-China trade war, companies are now trying to move their production to friendly countries where they don’t need to worry about getting caught in the geopolitical line of fire.
Apple has already begun shifting its base from China to Vietnam and India. Many famous brands like Samsung, Hasbro, Volvo, Adidas, and more have shifted their major base from China to Vietnam and other countries.
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(via)
