In the discussion “Vietnam – Strategic location in the global supply chain: Opportunities and challenges”, Mr. Nguyen Thang Vuong, Department of European and American markets (Ministry of Industry and Trade) shared that Apple has moved 11 factories producing audio-visual equipment to Vietnam.

Vietnam is one of the production locations for MacBook, AirPods, Apple Watch. (Photo: WSJ).

According to Apple's 2022 global supplier list, 25 suppliers are setting up factories in many provinces and cities in Vietnam, such as Advanced Semiconductor Engineering Technology, Lens Technology, LG Display, LG Innotek, Luxshare Precision, Murata Manufacturing, Samsung Electronics, Sharp...

Apple doesn’t disclose how much it spends on each supplier, and the list changes every year. It includes contractors that assemble iPhones, iPads, watches, and wireless headphones, as well as suppliers of chips, glass, aluminum frames, cables, circuit boards, and other components.

Previously, according to Reuters, in the 5 years up to 2019, China was the prime location for Apple suppliers, accounting for 44 to 47%. However, the rate decreased to 41% in 2020 and 36% in 2021. In contrast, Vietnam increased from 2.2% to 3.7% in the same period.

Data shows that Apple and its partners are trying to diversify by investing in countries outside of China, with Vietnam being a bright spot. According to DigiTimes, Vietnam could produce 20% of iPads and Apple Watches, 5% of MacBooks and 65% of AirPods by 2025.

In June 2023, Compal Electronics, a major manufacturer of iPads and Apple Watches, leased land in Vietnam to build a new factory to expand its capacity.

According to Thai Binh Province Electronic Information Portal, Compal Electronics Vietnam invested in Lien Ha Thai Industrial Park, a project specializing in manufacturing, processing, assembling computers and computer peripherals, communication equipment, household electrical products, and electronic components.

The project has a total registered investment capital of 260 million USD, estimated to generate revenue of about 1.2 billion USD in 2029 and 6.8 billion USD in 2037 when put into operation.

Compal already manufactures Apple products in Vietnam at its Vinh Phuc factory. Its major factories in China are in Chongqing and Jiangsu, as well as Phetchaburi in Thailand, according to Apple’s latest supplier list.

Meanwhile, Foxconn – one of Apple’s largest contractors – is gradually implementing its plan to allocate iPad and MacBook production to Vietnam. Foxconn currently employs more than 60,000 people in Vietnam. In 2022, the group announced an investment of $270 million to establish a new branch here.

According to the latest information from the Economic Daily News, Foxconn Industrial Internet (FII), a subsidiary of Foxconn, will exclusively supply servers made in Vietnam to Apple for training and testing AI services.

Foxconn is Apple's largest supplier of servers used in data centers. The group accounts for about 43% of the global server market.

Not only does Vietnam hold an increasingly important position in the manufacturing supply chain, it is also a relatively prominent market for Apple products. In May, after opening the Apple Store online here, CEO Tim Cook personally tweeted about the event. “We are excited to bring the best of Apple to even more customers around the world,” he wrote.

In the July 2022 financial reporting meeting, the head of the "bitten apple" also commented that Vietnam is among the best developing markets with double-digit growth.

With the appearance of the Apple Store online, Vietnamese users can buy iPhones and iPads from official stores and receive care from a Vietnamese-speaking team.

“Customers are at the heart of everything we do, and we are excited to launch the Apple Store online in Vietnam,” said Deirdre O'Brien, Apple's senior vice president of retail.

In addition, Vietnam is also the third country in Southeast Asia to support Apple Pay.

In an article titled “Apple Bets on an Emerging Market in Asia,” Quartz noted that Apple is looking for growth in countries with young and digitally savvy populations like Vietnam. The newspaper also cited figures such as an estimated annual digital economic growth rate of 40% in Vietnam, with a digital economic value of $23 billion in 2022, according to a report by Google, Temasek, and Bain & Company.

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