Apple Inc. plans to move up to 30 percent of its supply chain from China to Southeast Asia due to the worsening of the China-US trade dispute, Nikkei Asian Review reported on Wednesday.
Apple has requested its suppliers to assess the cost implications over the restructuring of the supplies to Southeast Asia. As per the report, there is a huge risk to the iPhone maker if it continues to depend heavily on China for its manufacturing.
Nikkei reported that iPhone assemblers Foxconn, Pegatron Corp, Wistron Corp, as well as major MacBook maker Quanta Computer Inc, iPad maker Compal Electronics Inc and AirPods makers Inventec Corp, Luxshare-ICT and Goertek have been asked to assess the cost implications for assembling their products outside China.
The iPhone makers are considering hotspot countries that have growing demand for smartphones as their primary hubs. Apple Inc. is focussing on countries like Mexico, India, Vietnam, Indonesia and Malaysia to settle their product assembling firms, stated the Nikkei report.
Considering the US-China trade war and the dependency of Apple Inc. on China, analysts at JP Morgan trimmed its price target and sales estimates while keeping the ratings steady, citing macroeconomic uncertainty fuelled by the trade war. As per a recent report, Trump might enforce new tariffs on China-made products worth about $300 billion. This would increase the cost of production for the smartphone giant by 14 percent.