This move showed that Vietnam has emerged as a preferred manufacturing destination for global tech giants.
For the first time, Apple is moving part of its iPad manufacturing out of China, taking them to factories in Vietnam, Nikkei Asia reported on June 1.
The development comes as lockdowns in the Chinese city of Shanghai disrupted supply chains for various tech products, prompting the iPhone maker to find alternatives, it said, adding that an iPad assembler has already built assembly lines in Vietnam.
Apple is already sourcing its Airpod earpieces from the Southeast Asian economy, which has registered sustained economic growth in the past two decades.
Vietnam has placed itself as a favourite destination for outsourcing manufacturing since the country adopted economic reform in 1980s.
A number of garment and shoe makers have moved their production lines from China to Vietnam after 2007.
But where Vietnam has really made its presence felt in the past decade has been in its ability to attract foreign direct investment (FDI) in factories that are assembling and manufacturing tech products from smartphones to TV components.
The Republic of Korea (RoK) and Japan – home to some of the biggest technology names – accounted for 376 billion USD in total FDI poured into Vietnamese manufacturing sector between 2015 and 2020, according to one study.
Last year, the RoK electronics giant LG invested more than 1 billion USD to increase OLED display output at the port city of Hai Phong.
Even before the COVID-related supply chain disruptions, rising tension between US and China had prompted tech companies to shift production to other countries, notably to Vietnam.
According to an analysis of Nomura – a Japanese investment bank, Vietnam’s economy was boosted by almost 8 percent due to the shift in production during the trade war.
Vietnam’s manufacturing sector has grown in double digits before the pandemic caused disruptions globally. Samsung already accounts for a quarter of Vietnam’s exports while Intel has set up its biggest chip assembly plant there.
All of this has helped Vietnam, a country of 100 million people, become one of the fastest-growing economies in the world.
There are predictions that Vietnam’s economy can overtake Singapore within a few years if it's able to maintain the current growth trajectory, TRT World reported.
Oxford Economics forecast that around 4 percent of global electronic exports will come from Vietnam by 2025.
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