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As trade war bites, some Pegatron Apple production moving out of China in June

As the trade war between the US and China worsens, some Pegatron Apple production is being moved out of China as early as next month, according to a supply-chain report today.

The Financial Times first reported back in January that Pegatron was planning to build production capacity in India, Indonesia, and Vietnam

Digitimes report today gets more specific, claiming that Pegatron will begin MacBook and iPad assembly in Indonesia next month.

Pegatron reportedly will start assembling Apple’s MacBook and iPad devices via PT Sat Nusapersada, a local manufacturer in Batam, Indonesia in June, according to an Indonesian-language report from DetikInet.

Abidin Hasibuan, CEO of PT Sat Nusapersada, did not deny that the company would start assembling products in June. The CEO did not specify the client or clients it would be working for, but said the products would be shipped to the US, according to the report.

Since Pegatron has recently established a partnership with the manufacturer, the reports said it believes the orders are most likely from Apple.

The local report suggests that Indonesia has been chosen over Vietnam thanks to a better supply of workers.

Pegatron president SJ Liao seemingly confirmed the original report back in January, stating that the company would have more to say later, and that exact plans would depend on the state of the trade war between the US and China. Given the massive escalation in that war by the Trump administration earlier this month, and the sanctions imposed on Huawei, it certainly makes sense that Pegatron Apple production plans would be implemented as quickly as possible.

Pegatron is not the only key Apple supplier looking to assemble products outside China: Foxconn has confirmed its own plans to begin mass-production of iPhones in India later this year.

Goldman Sachs has warned that the worst-case scenario for Apple in China could be a 29% fall in the company’s global profits.

Apple’s profits would plunge by almost 30% if China enacts a total ban on the company’s products, according to Goldman Sachs. The dollar amount would be a reduction in net income by over $15 billion annually.

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Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!

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