Apple Considers Plans to Shift MacBook Production to Thailand

The Lede: Apple is in talks with suppliers about moving the manufacture of MacBooks to Thailand as the company continues to shift its manufacturing lines outside of China amid geopolitical tensions.

What We Know:

• Three suppliers directly involved in discussions with Apple are mulling the possibility of assembling and producing components and modules for the company’s MacBook products in Thailand. Vietnam has also been a country where other Apple suppliers have moved.
• One supplier has suggested that it has begun building new plants in Thailand for Apple and that the construction of a new factory for MacBooks and other Apple products will be finished by the end of the year.

The Background: In the years since the shocks to global supply chains during the pandemic, Apple has increasingly expanded its own sourcing beyond China. Some production has been shifted to factories in other countries including India and Vietnam. U.S. tariffs on Chinese imports and China-Taiwan tensions also likely play a factor in re-shuffling production to mitigate uncertainties. Apple has already been mass-producing Apple Watches in Thailand for more than a year. At least 18 suppliers including Compal Electronics Inc., Sony Group Corp., and Western Digital Corp. have operations in Thailand.

Likely Outcomes:

• In line with U.S. policies toward firms doing commerce with China, Apple will continue to work with their suppliers to shift their production lines away from China towards other countries in Asia. Along the way, suppliers that work with Apple will adjust their own investments and physical facilities to move outside of China.
  
• China will adapt to keep up the production of its own tech brands of smartphones, computers, and apps. These brands already have a foothold in popularity in emerging markets. Two distinct spheres may solidify in the world where the U.S. and the western-aligned countries have one tech ecosystem while China and the many developing countries that it has been shoring up cooperation with operate on a Chinese-developed tech ecosystem.

Quotables:

“Ideally, Apple asked us to set up facilities in Vietnam for MacBooks, following in the footsteps of other Apple suppliers, but we offered an alternative option of building the product at our Thailand plants, which still have a massive space that can be reserved for the client. As MacBook assembly will begin in Vietnam first, we could support the components from our Thailand plants, too. … It will only take two to three days of logistics and custom clearance.” - senior executive at an Apple supplier

Good Reads:

Apple reportedly plans to produce MacBooks in Thailand to diversify supply chain (Yahoo)

Apple in Negotiations to Manufacture MacBooks in Thailand (Asia Financial)