AirPods Maker: Apple Suppliers Rushing to Leave China

AirPods Maker: Apple Suppliers Rushing to Leave China
Photo by Daniel Romero / Unsplash

Chinese suppliers are expected to relocate their operations out of the country faster than previously anticipated due to escalating tensions between Beijing and Washington, Bloomberg reported based on Apple’s key partner.

GoerTek, which produces AirPods, is among the many manufacturers exploring new sites outside of China – the country where most of the world's electronic devices are currently manufactured.

To this end, GoerTek plans to invest $280 million in a new Vietnam plant while considering expansion into India, according to Kazuyoshi Yoshinaga, GoerTek's Deputy Chairman. The US tech industry has been encouraging companies like GoerTek to explore alternative locations outside China, Bloomberg reported.

During China’s stringent “zero-COVID” policy, a shortage of electronic devices demonstrated the world's dependence on China.

As U.S.-China competition has intensified, with comprehensive restrictions on the exchange of chips and capital, the electronics industry's long-standing supply chain is being reassessed.

Apple has not disclosed any plans to diversify its operations beyond China, nor has it given an indication that it may decrease investments in the Asian giant. Coming out of Apple’s overall secrecy, suppliers are also reluctant to comment.

But Bloomberg reported it’s likely that nine out of 10 of Apple’s most important suppliers may be preparing large-scale moves to countries like India, because of its potential as a market and as a manufacturing base.

However, it could take up to eight years for Apple to transfer only 10 percent of its capacity from China, according to Bloomberg Intelligence's estimates.

Before it happens, currently, Vietnam is the only manufacturing site for the company outside of China.

GoerTek's Deputy Chairman, Kazuyoshi Yoshinaga, said in an interview with Bloomberg that the company’s new 62-hectare complex in Bac Ninh, which is expected to be operational within a year, will manufacture products for major U.S. brands.