Pegatron, one of Apple’s contract manufacturers, is reducing its operations in China

Continual political and economic uncertainties across Europe and between the US and China are creating a significant impact across the manufacturing sector. It has recently been revealed that such instability has led a number of Apple’s assemblers to shift their operations away from China and towards India and Southeast Asia.  

This weekend, Foxconn stated that it is set to invest significantly in India and Vietnam to ramp up its operations there, whilst Pegatron is moving a large number of its manufacturing operations to Indonesia, in order to mitigate a number of growing challenges, such as the threat of US tariffs on Chinese imports, an area of contention which shows no signs of abating. Pegatron has stated that it will also look towards investing in Vietnam and India to ensure its long-term longevity ahead of a tempestuous period.

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Although Apple has not made clear whether the production of its products are set to be manufactured elsewhere, such moves by two main manufacturing partners will no doubt create a significant impact on their ongoing business operations. The company recently announced that it has seen low sales figures regarding the recent flagship models across the competitive Chinese economy, where revenues could fall by 5%.  

“We have begun shipping from Batam island, Indonesia, in January,” Pegatron Chief Executive Officer Liao Syh-jang informed reporters. “Whether the US will decide to go ahead with new tariffs on March 1 will be a key impact on the speed of the company’s further diversification.”