Vietnam wants to be more involved in Apple’s supply chain.
According to the Vietnamese media SGGPNEWS, the Prime Minister of Vietnam, Pham Minh Chinh, recently visited Apple’s headquarters in California, and met with the CEO of the Cupertino company, Tim Cook. These would have discussed production in Vietnam.
Pham Minh Chinh is said to have explained during his meeting with Tim Cook that Vietnam is committed to creating a favorable business environment for American groups and investors. Highlighting the fact that Vietnamese consumers love Apple products, he also welcomed the fact that his country is increasingly involved in the global supply chain.
According to the SGGPNEWS article, there are 31 companies in Vietnam employing 160,000 people to produce components and equipment for Apple products. The Prime Minister is said to have asked Tim Cook to expand his supply chain in the country, and make it a model market for Asia.
Tim Cook would have, for his part, thanked the Prime Minister for the favorable environment in Vietnam for Apple’s operations, and indicated that the Cupertino company wishes to extend its supply chain in Vietnam, while involving more local players. .
For the moment, it is too early to talk about iPhone “Made in Vietnam”. But in any case, Apple has an interest in reducing its dependence on China when it comes to the supply chain.
Its dependence on China, a weakness for Apple?
In recent years, the place of the Middle Kingdom as the factory of the world has been questioned. First, there was Donald Trump’s trade war, which prompted many companies to produce more in China’s competitor countries to avoid potential tariffs.
Then there was the pandemic. And today, while most countries around the world are trying to return to normal life, China is still implementing a zero-COVID policy, which is impacting the global supply chain.
Factory closures due to lockdowns in China are causing disruptions in the production of Apple products. In a previous article, published in April, we relayed, for example, an estimate according to which this situation could cost Apple several billion dollars. And it doesn’t just impact the iPhone, but also other products, like Macs. Indeed, if Apple has a global supply chain, the firm is still too dependent on China for assembly.
Note that Apple is not the only major American group visited by the Prime Minister of Vietnam. According to SGGPNEWS, he also met with leaders from Intel and Google. The objective is the same: to encourage these groups to invest more in the country.
In Mountain View, Pham Minh Chinh met Rick Osterloh, who is the head of hardware at Google. During this meeting, Osteloh reportedly spoke about Google’s commitment to contributing to Vietnam’s economic growth.