Taipei-listed Foxconn said that it secured a new site in Viet Nam as Apple’s biggest contractor continued to shift production away from China, reported South China Morning Post (SCMP).

SCMP cited an exchange filling on Tuesday which said that Foxconn Technology Group had signed a lease with Sai Gon – Bac Giang Industrial Park Joint Stock Company to occupy a plot of 45ha in Quang Chau Industrial Park, Bac Giang Province for around US$62.5 million to meet operational needs and expand production capacity. The lease will run through February 2057.

The deal was implemented through Foxconn’s subsidiary Fulian Precision Technology Component Company.

Foxconn’s latest deal in Viet Nam was considered an effort to diversify more production away from China following major disruptions at its key iPhone manufacturing base in the central Chinese city of Zhengzhou amid stringent pandemic control measures imposed during the COVID-19 outbreak that began in late October, SCMP wrote.

Reuters reported that Foxconn last August signed a memorandum of understanding worth $300 million with Vietnamese developer Kinh Bac City to expand its facility in Bac Giang where it already produced iPads and AirPods. The types of products which would be produced at the new facilities was not mentioned.

SCMP quoted Apple chief executive Tim Cook as saying that COVID-19 challenges significantly impacted the supply of iPhone 14 Pro and iPhone 14 Pro Max and lasted through most of December. SCMP said he was referring to the turmoil at Foxconn Zhengzhou.

Nikkei Asia reported in late December that Foxconn finalised plans to relocate some of its MacBook production to Viet Nam and start making Macbooks in Viet Nam by mid-2023.

JP Morgan analysts forecast last year that Viet Nam would become one of Apple’s main manufacturing hubs which would make 65 per cent of AirPods by 2025, 20 per cent of iPads and Apple Watches and 5 per cent of MacBooks. — VNS