Apple supplier eyes Vietnam expansion

"We faced Covid controls for two months. We couldn’t have assessed that in advance, so that makes me emphasize our expansion in Vietnam, India, Indonesia, and North America," Reuters quoted its president, Liao Syh-jang, as saying at the company’s annual general meeting in Taipei Wednesday.

The company is seeking to address labor shortages and the gap between peak and low seasons and increase capacity utilization, he said.

Pegatron is one of Apple’s three iPhone suppliers along with Foxconn and Wistron.

In April, the Taiwanese company suspended operations at its Shanghai and Kunshan plants in China due to strict Covid-19 protocols, impacting production and deliveries.

China has since lifted the restrictions, but still faces a labor shortage that was sparked by the restrictions.

Chairman T.H. Tung said the company’s customers had "different reasons" for setting up factories in Vietnam, India and Mexico.

"But one shared factor is the ability to reduce concentration in Shanghai, Suzhou and Chongqing."

He added that hiring staff in China has become increasingly difficult over the past seven to eight years.

Pegatron has mulled expanding to Vietnam since 2020, and is building a factory in the northern city of Hai Phong.

Several Apple suppliers already have factories in Vietnam, including Foxconn, Luxshare and Goertek, and mainly make AirPods earbuds and HomePod speakers.

Earlier in June, Nikkei Asia reported that China's BYD, one of the leading iPad assemblers, had helped Apple build production lines in Vietnam and could soon start to produce the tablet there.

It attributed the move to China’s lockdown in and around Shanghai, which disrupted the supply chain for months.