Start Asia Apple supplier goes out of China

Apple supplier goes out of China

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Designed in California, made in China: Apple’s recipe for success is shaking because of the US-China trade dispute. Fearing an escalation, the suppliers of the electronics group are withdrawing their production capacity from the People’s Republic and are reissuing their supply chains in neighboring Southeast Asia. The latest example is Apple’s partner Pegatron, the largest iPhone maker after its competitor Foxconn.

For years, the Taiwanese company Pegatron had mainly relied on its factories in China. Only a little over two years ago – a few months before the election of US President Donald Trump – the supplier there announced an expansion of its factories.

Now the company sees itself forced to change direction. But it was planned anyway, to make themselves independent from the production in China, said Pegatron CFO Charles Lin. „Rising trading tensions are now accelerating our decision,“ he said late last week. The goal is the Southeast Asian community of states Asean: In up to three countries in the region he wants to invest in new production facilities.

Pegatron, which employs tens of thousands of workers in its Chinese plants, is one of a long line of Apple suppliers who are gradually withdrawing from China. With plants in Southeast Asia they want to protect themselves from the consequences of the trade conflict.