On January 15, in a filing to the Shenzhen Stock Exchange, Goertek said it would invest up to $280 million to establish a subsidiary in Vietnam to meet the needs of "long-term business expansion and operations" there.

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Goertek will invest up to 280 million USD to open a subsidiary in Vietnam. (Photo: Handout)

Goerktek's Vietnam entity will manufacture consumer electronics products ranging from AirPods and smartwatches to virtual reality and augmented reality devices.

The project meets both the Chinese manufacturer’s future growth plans and customer needs. The filing states that the project will help better utilize resources in Vietnam to improve the company’s overall competitiveness.

Goertek is one of the major Chinese suppliers approached by Apple to produce its Vision Pro mixed reality device, which is expected to be released in February in the US.

Goertek's Vietnamese subsidiary, established through the Goertek Hong Kong legal entity, may be located in Bac Ninh province, which attracts many Korean investors such as Samsung Electronics. Korean companies have opened factories producing electronics, smartphones, semiconductors and precision mechanical equipment here.

Goertek’s latest move comes as Apple begins to shift more production outside of China. China’s Covid-19 restrictions have disrupted Apple’s manufacturing supply chain and affected sales for the 2022 holiday season. Since then, Apple has encouraged its partners to diversify operations to other countries, including Vietnam.

According to research by investment bank TD Cowen, Apple suppliers – including Foxconn – have invested up to $16 billion to reduce their dependence on China by relocating factories to India, Vietnam, Mexico and the U.S. Last year, Foxconn announced plans to invest $1.6 billion to increase its presence in India.

(According to SCMP)