What They Say
Nikkei reports that Apple is moving some iPad production out of China to Vietnam, a move that has been considered for a while, but was delayed by a surge of Covid in Vietnam. The new facility will be developed by BYD, a Chinese partner of Apple. The firm has been pushing suppliers to build inventories and secure supply of parts for all its products, Nikkei said. Ideally, Apple would like dual-sourced component suppliers to be able to back each other up.
There is some concern from parts vendors that if demand continues to be weak, they may be left holding unwanted inventory.
Ivan Lam, an analyst with Counterpoint said, he expects it will still take until the second half of June for life to return to normal around Shanghai as the government avoids rushing things in its attempt to get life and work routines back on track.
A separate source said that according to an investment plan granted a registration certificate in September 2021, the project in Vietnam consists of 2 phases. BYD Vietnam factory phase I includes a factory area of 200,000 m² with the annual capacity of 4,325,069 tablets and 50 million optical prism products.
What We Think
When you have a customer as big and powerful as Apple, it’s hard to get the balance of risk right! (BR)
