Quartz is reporting that Apple’s main factory contractor, FoxConn, is about to invest $300 million in Vietnam in an effort to reduce Apple’s dependency on China as a manufacturing platform.
Apple has waited too long. The Chinese almost certainly will find ways to retaliate against Apple and they have dozens of ways to do it–supply chain disruptions, dawn tax raids, etc. And as relations between the United States and China continue to deteriorate, Apple is one of the most exposed American-based companies to geopolitical risk. There is also a growing effort by the U.S. government to freeze China’s semiconductor makers out of the world’s best technologies, which prevents Apple from buying certain Chinese chips. Tim Cook has made many tens of billions of dollars by betting his company’s future on China, but I would predict we are seeing the beginning of several years of unraveling. It won’t be pretty.
