AirPod Suppliers Reportedly Seeking Investment to Move AirPods Production to Vietnam

Your next pair of AirPods might be manufactured and assembled in Vietnam.

According to a new report from The Information, Apple suppliers Giertek and Luxshare Precision — two Chinese companies who create components for Apple’s AirPods lineup — are apparently seeking investment in order to move AirPods and AirPods Pro production to Vietnam.

The companies “make a number of accessories and components for the iPhone maker, including the AirPod, which has become a hit since its first release in 2016,” reads the report. “Both Luxshare and Goertek have benefited from strong consumer demand for AirPods, analysts say. The price of their stocks, which are traded on the Shenzhen Stock Exchange, has more than tripled since the beginning of the year. ”

Vietnam-based Goertek, for its part, is currently involved in the assembly of AirPods and lightning cables and is said to have begun manufacturing AirPods in July. However, this is reportedly just the trial phase and Apple is yet to finalize its production plan in Vietnam — the report suggests that actual production will only begin after the trial run ends.

The report notes that manufacturing is Vietnam would be a “natural alternative” for Apple due to its convenient geographical location to China, as Chinese components could be transported to the southeast Asian country via land, sea, and air. Labor costs in Vietnam are also roughly one-third of China’s, while Vietnam’s workforce is also reportedly “flush with fresh engineering graduates.”

Additionally, the Vietnamese government is also reportedly offering subsidies and tax breaks to manufacturers setting up shop in the country.

The discussions come as a growing number of electronics manufacturers move some operations out of China as a hedge against trade tensions between China and the U.S.