(Bloomberg) — Apple Inc. supplier BYD plans to begin commercial production of iPads this month in northern Vietnam after a trial run started in May, according to a provincial government official.
The production of the tablets is a boost for a country expected to benefit as electronics manufacturers seek alternatives to China.
“The factory has been running a trial phase since May and is scheduled to start commercial production this month,” said Nguyen Ngoc Hanh, head of the management board for industrial parks in Phu Tho province. “That is what they reported to us. They plan to hire 12,000 workers in total. They already have hired 4,000.”
Officials at the Phu Ha Industrial Park in December granted BYD a construction license to build a 6.23 trillion dong ($268 million) factory, according to a statement posted on the website of Phu Tho province. The plant will have the capacity to make 4.33 million tablets a year from as early as June 2022, according to the statement. BYD, which now assembles iPads mostly in China, will also be able to produce 50 million units of optical glass a year.
BYD plans to expand production lines in 2024, Hanh said by phone.
It’s unclear whether the figures were preliminary estimates, and the notice didn’t specify iPads. Representatives of BYD in Vietnam were not immediately available for comment, while calls and emails to the company’s Shenzhen headquarters went unanswered after regular hours.
Apple suppliers with large production bases in China began considering shifting capacity to Southeast Asia after tensions between Washington and Beijing escalated, a shift that pandemic-era upheaval is expected to accelerate. This year, a series of lockdowns from Shanghai to Shenzhen have cast supply chains in disarray, exposing the fragility of a system that depends on China to make the majority of the world’s electronics.
Apple estimates Covid restrictions in China and other supply constraints will cost the company as much as $8 billion of sales. The company now plans to shift some iPad production to Vietnam from China, the Nikkei reported June 1. BYD could begin iPad production in the Southeast Asian country soon, Nikkei said.
Vietnam’s government said in January 2021 that Foxconn Technology Group — Apple’s most important production partner — planned to invest $700 million in the country that year. The northern province of Bac Giang granted a $270 million investment license to its unit Foxconn Singapore to produce laptops and tablets, officials said.
(Updates with government official saying BYD is producing iPads in the first and third paragraphs.)
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