Apple (AAPL) is 'More Aggressively' Relocating Production from China to India and Vietnam - JPM

JPMorgan analyst Gokul Hariharan sees Apple’s (NASDAQ: AAPL) relocation efforts increasing to mitigate the supply chain risks, which are mainly tied to China and Shanghai.

Hariharan forecasts that Apple is manufacturing around 95% of its products in China today, a number that should fall to about 75% by 2025.

“Vietnam is emerging as the production hub for components (camera modules) and EMS of smaller-volume products (Apple Watch, Mac, iPads) and is already a major destination for AirPods manufacturing. For iPhone EMS, India appears to be the location of choice for diversifying the supply chain away from China,” Hariharan said in a client note.

As far as iPhones are concerned, JPMorgan estimates that the company will move ~5% of iPhone 14 production to India from late 2022 and reach 25% by 2025.

“We expect ~20% of iPad, ~5% of MacBook, ~20% of Apple Watch and ~65% of AirPods production to be located in Vietnam in 2025,” Hariharan added.

Moreover, the analyst also sees more companies in the Apple supply chain reaccelerating their own supply chain relocation efforts. Along these lines, Hon Hai is likely to be the key winner during the relocation trend.

By Senad Karaahmetovic

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