Apple CEO Tim Cook introduces iPads and mini iPads in Cupertino, California. (Photo: AFP/VNA) Hanoi (VNA) - Vietnam has been a fast-rising star in the global manufacturing spot, according to techwireasia.com, an independent tech news website that covers enterprise and technology in Asia.
“Vietnam has slowly been rising to be Apple’s most important manufacturing hub. It started with Vietnamese manufacturers having previously been contracted to make some of Apple’s flagship products including iPads and AirPods,” the website said.
Then when the COVID-19 lockdowns affected the supply chain in China, Cupertino gradually started shifting iPad production to Vietnam. Apple’s leading iPad assembler, BYD, is reportedly assembling the tablets at its production lines in Vietnam.
The iPad will actually become the second line of Apple products following the Airpods wireless earbuds to be made in Vietnam.
Nikkei Asia recently reported that Apple is in talks to make Apple Watches and MacBooks in Vietnam for the first time, marking a further win for the Southeast Asian country as the US tech giant looks to diversify production.
Apple suppliers Luxshare Precision Industry and Foxconn have started test production of the Apple Watch in northern Vietnam with the aim of producing the device outside of China for the very first time.
The Apple Watch is even more sophisticated, according to industry experts, who say that squeezing so many components into such a small case requires a high degree of technological skill. Producing the device would be a win for Vietnam as the country attempts to further upgrade its tech manufacturing sector.
The number of Apple suppliers with facilities in the country has increased to at least 22 from 14 in 2018, according to Nikkei Asia’s analysis of Apple’s latest available suppliers list and interviews with sources.
The last few years, more so since the pandemic, global businesses started to diversify, to increase resiliency and connectivity of their supply chains and decrease reliance on a single country. All that led to Vietnam becoming a top destination for investment in manufacturing due to its strategic location and advantages in shipping, competitive labor, and production costs.
Especially when it comes to the assembling and manufacturing of tech products from smartphones to TV components, Vietnam has made its presence felt in the past decade. The Republic of Korea and Japan – both home to some of the biggest technology names – account for the largest chunk of 376 billion USD of FDI, which came into the Vietnamese manufacturing sector between 2015 and 2020, according to one study. Last year, RoK electronic giant LG invested more than 1 billion USD in ramping up its OLED display output at the Vietnamese port city of Hai Phong.
Prime Minister Pham Minh Chinh visits a phone circuit board production line of Samsung Electronics Vietnam in Thai Nguyen. (Photo: VNA) Overall, due to the shift in production caused by the trade war, Vietnam’s economy was boosted by almost 8%, according to an analysis of Nomura – a Japanese investment bank. Samsung already accounts for a quarter of Vietnam’s exports and even this year the tech giant reinforced its position as the largest exporter in Vietnam. US-based Intel has also set up its biggest chip assembly plant there.
Vietnam is doing all it can to attract American investors. Oxford Economics predicts that around 4% of global electronic exports will come from Vietnam by 2025.
“That really makes Vietnam, which is close to China, an ideal destination for many electronics makers as the nation gradually grows its supply chain ecosystem,” Eddie Han, a senior analyst with Isaiah Research, told Nikkei Asia.
Vietnam’s GDP growth is forecast to surge from an estimated 2.6% in 2021 to 7.5% in 2022, with resilient manufacturing and a robust rebound in services serving as the driving forces for economic recovery. According to the latest economic update by World Bank (WB) for Vietnam, the country’s economy expanded 5.2% in Q4 of 2021, and respectively 5.1% and 7.7% t in Q1 and Q2 of 2022./.
