Apple just announced a list of its supplier partners for fiscal year 2021 (ending September 2021). This report reveals 180 companies, accounting for 98% of Apple’s direct costs for materials, manufacturing and assembly worldwide.
Of these, 25 have factories in Vietnam, or 14% of the total. This number is up from the same ratio for 2020 (21 companies and 10%).
Many family partners
Concretely, the list includes many well-known Apple manufacturing partners such as Hon Hai Precision (Foxconn), Luxshare Precision or component suppliers Samsung, LG Display, Intel …
In fiscal year 2021, Apple added 5 new partners with factories in Vietnam and eliminated one company (Foster Electric, which has factories in Binh Duong and Da Nang).
In addition, this list also includes Luxshare Precision’s plant in VSIP Industrial Park (Hung Nguyen District, Nghe An Province), which has been operational since 2020. Previously, Luxshare manufactured Apple devices in Bac Giang.
Apple’s quote shows that it is still largely dependent on Chinese partners and factories established in this country. Apple added 6 Chinese companies last year and eliminated 7.
However, the trend outside of China is still evident from the 2017-2020 period, when a third of Apple’s partners had factories in China.
“Apple may reduce production in mainland China and increase its presence in India and Vietnam, but remains closely linked to Chinese companies that are part of its supply chain,” said Isaiah Research analyst Eddie Han, shared with SCMP. .
Higher expectations from Vietnamese factories
In late September, a report from JP Morgan said Vietnam would become a major manufacturing area for Apple, supplying 65% of AirPods, 5% of MacBooks, 20% of iPads and Apple Watches, by 2025. .
Nikkei Asia sees this strategy as a step forward for Vietnam in manufacturing and contributing to the global supply chain.
However, right now, all supply partners working directly with Apple are Chinese. Therefore, Vietnam’s success in manufacturing has attracted many other companies to build supply chains.
Furthermore, Nikkei said that Vietnam has yet to develop a high-tech sector, which makes it difficult for policy makers.
According to Nikkei Asia, Vietnam has a growth rate in its technology exports that no other Southeast Asian country can match, with growth of 42% in 2020 compared to 13% in 2010. But very few of them contribute to the growing economy of the country.
However, most of the Vietnamese manufacturing industry can only assemble for big brands from other countries.
In the 2020 list of the best suppliers of Samsung Electronics, the group counts only foreign companies in Vietnam, while it has been operating in this country for 14 years and half of its smartphones are produced there.
Nikkei Asia said that Vietnam has many advantages over other countries, such as cheap and disciplined labor and good economic development policies. However, the country also faces many other obstacles such as a low-skilled workforce and a lack of technical equipment.- CPV / VNA
