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Apple is reportedly telling some of its manufacturing companies that it wants to increase production outside of China, citing COVID lockdowns as one reason for the postponement. India and Vietnam are high on the list of locations for potential production increases, the Wall Street Journal said in a Saturday report based on information from anonymous sources.
Over 90% of Apple’s products are made in China by contractors, the Journal found, but tensions between China’s communist government and the US make the company’s reliance on China risky, and COVID lockdowns in China have caused supply chain disruptions . In April, Reuters reported that lockdowns in areas of China could mean shortages of millions of iPhones.
In 2019, the Journal reported that Apple was considering moving a significant portion of the production of some of its devices to other countries amid trade tensions between China and the United States. The outlet’s Saturday report says the pandemic has disrupted those plans, but Apple has once again focused on the issue.
Still, China remains an enticing place to manufacture gadgets, according to the Journal, due to the country’s robust manufacturing ecosystem, skilled workforce and low costs, as well as the huge domestic market for gadgets. About a fifth of Apple’s global sales are often attributed to China, according to the Journal.
Apple considers India its second-best location due to its low cost and large population, the Journal reported. iPhones are already being manufactured there for the domestic market, with sales of Apple products in India increasing rapidly.
But China-based contract manufacturers may struggle to establish themselves in India due to strained relations between the two countries’ governments, the Journal says, making Vietnam and other Southeast Asian countries attractive locations.
Apple did not respond to a request for comment.