Apple is considering moving between 15% and 30% of its output away from China. Amid trade tensions between the U.S. and China, it asked suppliers to review the costs of production in both South East Asia and Mexico.
It is though not only the trade tensions that made Apple consider its position in China. An executive, described as having “knowledge of the situation” told the Nikkei Asian Review:
A lower birthrate, higher labor costs and the risk of overly centralizing its production in one country. These adverse factors are not going anywhere. With or without the final round of the $300 billion tariff, Apple is following the big trend [to diversify production],” giving itself more flexibility.
It is understood that it would take 18-months to shift Apple’s production line. An executive explained that “the production line for Apple’s products is very complicated, and when production begins, it will only be small volumes to test the water.” It is understood that the new capacity would not just serve the U.S. but new supply chains too.