Apple will reportedly move some iPad capacity to Vietnam after China lockdowns

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People walk past an apple store in Wangfujing with iPhone 13 series advertisement on a big screen.
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Apple is moving some of its iPad production to Vietnam from China after supply chain disruptions stemming from coronavirus lockdowns have contributed to product and part shortages, Nikkei Asia said Tuesday.

It shows how Apple is trying to manage supply to meet demand from consumers and expand manufacturing outside of China, a process it began to accelerate as U.S.-China trade tensions heightened. The iPhone-maker already produces some of its AirPods in Vietnam, for example. The shift to move some iPad production to Vietnam may help it boost iPad revenue.

CEO Tim Cook said in April the company’s iPad segment had “very significant supply constraints” in the second quarter. IPad revenue was down 1.92% year-over-year, the only segment in Apple’s business that saw a drop. And Apple CFO Luca Maestri warned of several challenges the company faces in the current quarter, including supply constraints related to Covid-19 that could hurt total sales by between $4 billion and $8 billion.

Apple has asked some suppliers to build up their supply reserves of components such as printed circuit boards and some electronics parts, especially those made around Shanghai, Nikkei Asia reported Wednesday.

An Apple spokesperson did not immediately respond to CNBC’s request for comment.

Read the full report from Nikkei Asia here.

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