First Major Apple Supplier Plans U.S. Manufacturing Expansion

In a significant development, Luxshare ICT, a prominent manufacturer for Apple, is planning to establish production facilities in the United States to circumvent existing tariffs imposed by the U.S. government. The company, known for producing products such as the Vision Pro and AirPods, aims to enhance its production capabilities beyond China, with the U.S. market being a key focus.

Wang Laichun, the chairperson of Luxshare ICT, indicated that the company is exploring opportunities to localize production in the U.S. contingent upon receiving commercial guarantees and a thorough assessment of the operational landscape. The move underscores the necessity for U.S. government support to attract Luxshare ICT and potentially secure purchase agreements.

Luxshare ICT currently operates in various countries, including China, Malaysia, Vietnam, Thailand, and Mexico, with some smaller facilities in the United States. The company's diversification strategy aims to mitigate risks associated with potential tariffs, which have become a pressing concern as the U.S. administration continues to impose stringent trade regulations.

The company is particularly focused on automating its manufacturing processes, which could significantly enhance production efficiency compared to traditional methods employed in Asia. The modernized facilities are expected to be designed with a high degree of automation to meet the growing demands of the U.S. market.

As Luxshare ICT navigates the complexities of expanding into the U.S., the timeline for establishing these facilities remains uncertain, potentially taking several years to complete. The ongoing trade tensions between the U.S. and China, marked by high tariffs, have prompted Apple to expedite its efforts to import devices under more favorable conditions before the deadline for existing tariffs expires.

While establishing new manufacturing sites in Vietnam took between one and one-and-a-half years, aided by the region's resources, it remains to be seen whether a similar timeline can be achieved in the U.S. The challenge will be to replicate the existing supply chain efficiencies and operational support that are currently available in other production hubs.