Apple explores moving 15-30% of production capacity from China - Nikkei (updated)

Inventec

19/06/2019 11:06

(Adds details on negotiations, background on Foxconn's
production capacity)
    June 19 (Reuters) - Apple Inc  AAPL.O  has asked its major
suppliers to assess the cost implications of moving 15%-30% of
their production capacity from China to Southeast Asia as it
prepares for a restructuring of its supply chain, according to a
Nikkei Asian Review report on Wednesday.
    Apple's request was a result of the extended Sino-U.S. trade
dispute, but a trade resolution will not lead to a change in the
company's decision, Nikkei said https://s.nikkei.com/31zCGhw,
citing multiple sources.
    The iPhone maker has decided the risks of depending heavily
on manufacturing in China are too great and even rising, it
said.
    Key iPhone assemblers Foxconn  2317.TW , Pegatron Corp
 4938.TW , Wistron Corp  3231.TW , major MacBook maker Quanta
Computer Inc  2382.TW , iPad maker Compal Electronics Inc
 2324.TW , and AirPods makers Inventec Corp  2356.TW ,
Luxshare-ICT and Goertek have been asked to evaluate options
outside of China, Nikkei reported.
    The countries being considered include Mexico, India,
Vietnam, Indonesia and Malaysia. India and Vietnam are among the
favorites for smartphones, Nikkei said, citing sources who did
not want to be identified as the discussions are private.
    Last week, Foxconn said it had enough capacity outside China
to meet Apple's demand in the American market if the company
needed to adjust its production lines, as U.S. President Donald
Trump threatened to slap further $300 billion tariffs on Chinese
goods. 
    China is a key market for Apple as well as a major
production center for its devices.  urn:newsml:reuters.com:*:nL4N23I0ZK
    A group of more than 30 people from Apple's capital expense
studies team have been negotiating production plans with
suppliers and governments over monetary incentives that could be
offered to lure Apple manufacturing, the report said.
    A deadline has not been set for the suppliers to finalise
their business proposals, Nikkei said, adding that it would take
at least 18 months to begin production after choosing a
location.
    Apple and Foxconn did not immediately respond to a request
for comment on the report.

 (Reporting by Sathvik N in Bengaluru; Additional reporting by
Aishwarya Nair; editing by Gopakumar Warrier and Rashmi Aich)
 ((Sathvik.N@thomsonreuters.com; +1-646-223-8780, outside
N.America, +91-80-6749-2783; Reuters Messaging: Reuters
Messaging: Sathvik.N.thomsonreuters.com@reuters.net))