Apple has just announced the list of supply partners for the company in 2021. Apple has eliminated one company and added 5 new partners with factories in Vietnam.
The list includes 180 companies, accounting for 98% of Apple’s direct costs for materials, manufacturing, and assembly globally. In particular, mainland China is where Apple’s partners have the most factories with nearly 150 factories. Followed by the US and Taiwan (China) with 48 and 45 factories respectively.
Of Apple’s 180 partners, 25 companies have factories in Vietnam, accounting for about 13% of the total number of partners, an increase of 4 companies compared to 2020 and ranked 6th.
In fiscal year 2021, Apple has added 5 new partners with factories in Vietnam, and at the same time removed Foster Electric (with factories in Binh Duong and Da Nang) from Apple’s list of suppliers. In addition to familiar names such as Hon Hai Precision (Foxconn), Intel, LG, Sharp …, this list also adds another factory of Luxshare Precision in Nghe An (in 2020, Luxshare only has a factory in Bac Giang to supply components to Apple).
In addition, some partners with factories in Vietnam added to this list are Advanced Semiconductor Engineering Incorporated (Hai Phong), INB Electronics Limited (Phu Tho), RR Donnelley and Sons Company (Hai Duong), Shanghai Industrial Holdings Limited (Bac Ninh), Young Poong Corporation (Vinh Phuc).
Nikkei Asia considers this a step forward for Vietnam in the field of manufacturing and contributes to the global supply chain. However, most of the partners that set up factories in Vietnam are foreign companies, there are no domestic enterprises.
According to Nikkei, Vietnam has many advantages compared to other countries such as a highly disciplined, cheap labor force and good economic development policies. On the other hand, Vietnam is lacking in management and skilled workers. The solution is more training that will yield these skills.
At the end of September 2022, a report from JPMorgan stated that Vietnam will become an important production area for Apple, supplying 65% of AirPods, 5% of MacBooks, 20% of iPads and Apple Watch, by 2025.
According to the report, Vietnam is emerging as a center for manufacturing electronic components and manufacturing services (EMS) for small volume products (Apple Watch, Mac, iPad) and is becoming main AirPods production.