Most of Apple’s production of the MacBook and Apple Watch products happens in China, with some outsourcing in Brazil. However, a new report suggests the company behind manufacturing for Apple is willing to diversify outside China, with Vietnam a likely destination.

According to Nikkei Asia, Foxconn and Luxshare Precision Industry are testing production runs of the Apple Watch in Vietnam.

It is worth noting that this diversification is specific to the Apple Watch and potentially MacBooks. Apple already has a manufacturing presence in Vietnam, with the iPad and AirPod devices made in the country.

However, the manufacturing of Apple Watch hardware requires more precision and skilled workers. Foxconn is testing Vietnam to see if it can supply those skilled employees. If successful, it will shift manufacturing.

Branching Out

That would be a big economic gain for Vietnam, but also helpful to Apple. The company is conducting a similar test production for MacBooks in the country. This has been ongoing from before the pandemic, although the trial was slowed during lockdowns.

It is worth noting that MacBooks require a more complex supply chain. It seems Vietnam does not quite have the infrastructure that Chine supplies in that chain. However, if Apple commits to the country then it could be brought up to speed.

Nikkei Asia quotes a source close to the matter:

“AirPods, Apple Watch, HomePod and more … Apple has big plans in Vietnam, apart from iPhone manufacturing. The components for MacBooks have become more modularized than in the past, which makes it easier to produce the laptops outside of China. But how to make it cost-competitive is another challenge.”

China has been imposing increasingly strict manufacturing measures since the pandemic. This has shown Apple that it cannot rely on using one country predominantly as a manufacturing base. Diversification seems to be inevitable, whether it is into Vietnam or elsewhere.

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