Pegatron, the Apple’s iPhone assembly partner plans to expand its production to outside China and Vietnam is expected as one of the destinations.
“We’ve had to deal with Covid control measures over the past two months. It’s been unpredictable. So I want to expand our production to Vietnam and some other countries” , Liao Syh-jang, President and CEO of Pegatron said at the group’s annual shareholder meeting, the Reuters reported.
Pegatron is one of three Apple’s iPhone manufacturing partners, alongside with Foxconn and Wistron. Since April, its factories in Shanghai and Kunshan (China) being suspended due to social distancing orders due to control Covid-19 measures. This affects production and delivery to the company’s partners.
So far, China gradually lifted restrictions. However, Pegatron still continues to face a labor shortage because of the covid-19 pandemic.
Liao Syh-jang said that, expanding production to other regions, including Vietnam, is one of the solutions to solve labor shortages, the gap between peak and off-peak seasons, and increase increase production capacity.
T.H. Tung, chief strategy officer of Pegatron said that, the decision had an impact from Apple as its customers have different reasons for setting up factories in Vietnam, India and Mexico.
One of the reasons is that, stakeholders want to reduce the concentration of production to Shanghai, Suzhou, and Chongqing as companies like Pegatron have found it increasingly difficult to hire the local labor force in China over the past 7-8 years.
Since 2020, Pegatron started building a factory in Hai Phong. A series of Apple’s assembly partners such as Foxconn, Luxshare, and Goertek also have factories in Vietnam, but no factories have yet assembled iPhones.
As of today, Apple products manufactured in Vietnam include AirPods and HomePod and iPad.
Not only Apple, major giant electronics firms such as Samsung, LG and Xiaomi already set-up thier manufacturing plants in Vietnam.