Apple making big move to Thailand as production shifts from China

Late last year, news broke that Apple Inc. was planning to shift production from China to Thailand, it now appears that this move is becoming a reality.

According to a report by Nikkei today, the multinational technology company based in California is currently in discussions with suppliers regarding the manufacturing of MacBooks in Thailand, as part of its strategy to expand manufacturing outside of China.

Sources close to the discussions have revealed that these suppliers already have existing manufacturing complexes in Thailand, which they use for other clients. They are now exploring the possibility of producing and assembling components and modules for MacBooks. This move comes as Apple and its key suppliers aim to avoid the potential impact of Sino-US trade frictions, particularly in light of the five years of heightened tensions between the two nations and the US tariffs on Chinese goods.

In December 2022, analyst Ming-Chi Kuo tweeted that Thailand might become the main production location outside of China for Apple’s future MacBooks.

Currently, the entire range of MacBook Air and MacBook Pro models are assembled in Chinese factories. This shift in production outside of China is crucial for Apple, particularly following a year of Covid-19 upheaval in China’s manufacturing sector. The company no longer feels comfortable having too much of its business tied up in one place.

Alan Yeung, a former US executive for Foxconn said…

“In the past, people didn’t pay attention to concentration risks. Free trade was the norm and things were very predictable. Now we’ve entered a new world.”

Apple has a long-standing relationship with Thailand, and its products are extremely popular in the country. The company has stores in Bangkok, Chiang Mai, and Phuket and works with several Thai partners and developers to create apps and services for the Thai market. Apple has also invested in research and development in Thailand and is working with the Thai government to create educational initiatives.

Apple’s plan to shift production out of China and into Thailand is seen as crucial for the company to minimize risks and ensure business continuity, particularly in the face of mounting Sino-US trade frictions and five years of heightened US-China military and economic tensions.

With its strong relationship with Thailand and investment in the country’s research and development, Apple is well-placed to expand its manufacturing footprint outside of China.