Apple, Google Production Shift to Vietnam Slowed by COVID-19

Apple first began shifting AirPod production to Vietnam two years ago, when the trade relationship between the US and China became particularly sticky. Just after imposing new punitive tariffs on China-made products, US government officials began visiting Chinese equipment suppliers (namely Huawei) in “an effort to draw those companies over to [their] side in the escalating Washington-Beijing tech war.” It was clear that the visits constituted a warning.

Vietnam proved an attractive alternative, and Apple, Microsoft, Amazon, and other major tech suppliers set up shop there quickly. While Vietnam lacks the engineering power other countries possess, its workforce is young, and its proximity to China made a transition appear at first to be relatively painless. But since then, the pandemic has forced the tech giants to pump the brakes. Thanks to the ever-changing restrictions and demands related to COVID-19 (as well as Vietnam’s limited engineering resources and a half-baked notebook computer supply chain), Apple’s transition of MacBook, iPad, and AirPod manufacturing to Vietnam has been put on hold, according to a source for NikkeiAsia. Amazon’s smart speakers, smart doorbells, and security cameras have also gotten stuck in the transition as northern Vietnam has scrambled to address COVID-19 surges through more stringent guidelines.

People close to the situation have reported Apple will continue to push for 20 percent of AirPods to be produced in Vietnam at a later point. One executive at a supply chain serving Apple and Google told NikkeiAsia that introducing new products to Vietnam’s manufacturing chain is challenging when compared with products that have already been in production elsewhere, mostly due to travel restrictions between there and China. Suppliers have had a tough time sending engineers to Vietnam to assist with setup and implementation; many are insisting on waiting until sleeping accommodations can be made for workers. This may result in new releases continuing to be manufactured in China.

While the location in which a device is manufactured doesn’t necessarily impact the casual consumer, production slowdowns like this one can easily affect companies’ ability to sell devices at the same scale they’ve predicted or sold at before. Apple, Google, and Amazon are far from the only companies impacted by pandemic-related production delays—technologies from Tesla’s Cybertruck to the average computer chip have been impacted and will be for the near future.