Vietnam to make Apple Watch and MacBook

https://asia.nikkei.com/Business/Technology/Vietnam-to-make-Apple-Watch-and-MacBook-for-first-time-ever

by jseliger • 4 years ago

555 529 4 years ago

asia.nikkei.com

nkingsy• 4 years ago

Doesn't seem far enough away or nuclear armed enough to be a very good backup plan.

coolspot2• 4 years ago

The main criteria for Apple is how poor and abundant population is.

MuffinFlavored2• 4 years ago

Where were Apple Watch and MacBook made before Vietnam? Is the answer just China and nowhere else?

How much does it cost in that location now compared to what it's going to cost now to make it in Vietnam?

How many Vietnam workers is this going to employ, and are they going to be working for like... $3/day?

hn4000• 4 years ago

Not only how poor and abundant the population is.

'Money is the first thing. Morals follow on.' (based on B. Brecht)

From Wikipedia:

Democracy Index 2021: Vietnam 131 / China 148 (Norway 1 - best / Afghanistan 167 worst)

Freedom In The World 2021: Vietnam 167 / China 184 (Finland 1 - best / Syria 194 - worst)

shp0ngle2• 4 years ago

Vietnam is not that poor. Vietnam is MUCH richer than its direct neighbours, Laos and Cambodia. Thailand is richer though.

The actual thing is not really poor population, but how easy is to build new factory there.

Vietnam has the best thing for that - it is easy to build new stuff there, as the infrastructure exists; however, they absolutely ignore any environmental laws and just spew all waste into rivers and air.

Look up Formosa Steel incident - https://en.wikipedia.org/wiki/2016_Vietnam_marine_life_disas... - huge disaster of a Taiwanese company, after which there were big protests. Communist government then arrested all protesters and put them to 20 years in prisons (for protesting against a foreign company!). Nobody protests about environmental waste now.

rdsnsca• 4 years ago

The main criteria for every electronics company, singleing out Apple is just BS.

mountainb• 4 years ago

It is a good backup plan for sanctions against China and a blockade or war with Taiwan because of the port facilities, advanced infrastructure, and other advanced industry. For World War 3 it's not necessarily a great plan, but it's as good as any other plan for that scenario.

coffee_beqn3• 4 years ago

Vietnam is the most proven country at defeating a super power militarily.

quickthrower23• 4 years ago

Touche. And if they make the phones somewhere expensive they are guaranteed to go out of business instead of it being a risk.

abudabi123• 4 years ago

Westmoreland's Operation Fracture Jaw got canned by elite circle in politics and the rest is Rambo Hollywood history boomer tears in beers.

tunap3• 4 years ago

I suppose this means Wisconsin is SOL.

https://www.theregister.com/2022/05/25/foxconn_wisconsin_fac...

missedthecue• 4 years ago

They were never going to build Apple products there though. That was for LCD television components.

ziddoap• 4 years ago

I don't think the point they were making was about Apple products being built there, but that Foxconn continues to put their attention elsewhere with other projects.

tunap3• 4 years ago

And now they're not making LCDs. Or, anything else there. While building new facilities where the labor is cheap, despite the PR grandstanding a few years back.

Sounds to me like WI is SOL.

r00fus2• 4 years ago

Most likely Foxconn/WI just crony capitalism and political circus. Numerous articles over the past years about complete lack of delivery by Foxconn and lack of political followthrough from WI state government.

aaronbrethorst• 4 years ago

Let's be clear about what actually happened here: Donald Trump and Scott Walker wanted a 'win,' Foxconn was able to get some terrific subsidies, and Wisconsinites got a raw deal out of it.

https://www.theregister.com/2022/05/25/foxconn_wisconsin_fac...

hindsightbias2• 4 years ago

Americans got fat and have all those child labor laws.

And yet the kids can’t find work…

ren_engineer• 4 years ago

Apple suppliers Luxshare Precision Industry and Foxconn

lol this is a political move, they are just creating Vietnamese shell companies owned by their same Chinese suppliers to get some good PR.

rjzzleep2• 4 years ago

It's not a political move. Vietnamese manufacturing is cheaper than Chinese. Chinese labour has gotten expensive over time.

EDIT: politics are definitely a welcome side effect, but not the main reason

alphabetting4• 4 years ago

Why would Apple decide to build in Vietnam after secretly committing $275B to advance Chinese manufacturing? Western political heat seems most logical.

newsclues• 4 years ago

Also Covid-19 lockdowns, and diversified factories is making sense.

jollybean3• 4 years ago

Since the Russia-Ukraine war broke out politics is now a primary driver.

China has indicated that it is 100% going to retake Taiwan. Their threat is credible. There were indications it would be soon.

War is a 'new reality' again and we can see the consequences of it.

If you have geopolitical liabilities and you have 10 year strategic planning, then you calculate the odds of 'major conflict' the diversifying away from China is a priority.

Anyone not divesting from China right now is going to get rocked.

Not fully divested but I mean the critical things. We have to plan for China arm of the business dissapeaering overnight.

foepys• 4 years ago

It's probably not even for good PR. As far as I know China has become quite more expensive for manufacturing, so companies switch to other countries like India, Bangladesh, Thailand, and Vietnam.

mstudio• 4 years ago

Is this a fact (or have other co's done this)? I'm genuinely curious. I assume they'd hire Vietnamese employees though.

jsnk• 4 years ago

It's a start. What other reasonable moves do you expect to reduce Chinese manufacturing dependency? At Apple scale, you can only make such large transition over multiple years.

Vietnam is a capable developing country that may do a lot manufacturing in the future. Samsung has been working with Vietnamese subsidiaries for a while now, so move by Apple is already proven to be viable.

bergenty• 4 years ago

I think like 7% of iPhone 13s are also made in India and that number is supposed to grow so I think they’re trying to hedge well.

shp0ngle2• 4 years ago

However they still actually make the products there.

Last time I look, Apple was hiring a lot of HW engineers in Saigon. (Still no SW engineers, though :))

Also, Foxconn is a Taiwanese company, not Chinese. (Setting aside the issue of "what is China, really".)

nick9847• 4 years ago

And the products will be more overpriced than ever.

brailsafe2• 4 years ago

Not if you make money using them

olyjohn• 4 years ago

I have a $20,000 MacBook Pro to sell you. You can use it to make money.

Rackedup2• 4 years ago

And ads are coming....

threeseed2• 4 years ago

Ads have been present on the App Store, News+ etc for years now.

quickthrower23• 4 years ago

Less underpriced perhaps?

mgraczyk2• 4 years ago

A lot of comments here are criticizing Apple for chasing cheap labor.

Ignoring for a second the fact that this has a lot more to do with geopolitics and hedging geopolitical risk, I think it's important to think more carefully about the impact of companies investing in developing economies.

By and large, the factory work done by people in developing economies is dramatically better in terms of quality of life and safety than the agricultural work that they would be doing without economic development. It would be better if the factories were more often owned domestically (instead of owned by Chinese companies), but the actual workers are not suffering in the short term as a result of Apple bringing jobs. The complete opposite is true.

tasubotadas• 4 years ago

Capitalism is one of the biggest eradicators of poverty. 1B of people in China was lifted from poverty because of it. And once it's done with one poor country, it starts taking care of the others :)

CameronNemo• 4 years ago

adolph• 4 years ago

Is it ironic that the capitalistic poverty lift solidified the CCP?

LtWorf4• 4 years ago

Capitalism with a strong central government that regulates it tightly you mean.

wbsss441211• 4 years ago

The China duality: It seems that China is a capitalist country when people want to discuss their achievements, and a communist country when they want to discuss their faults.

mattigames3• 4 years ago

Did it eradicated poverty in Burundi? South Sudan? Malawi? Pakistan? I can cherry pick examples too; means nothing, and what about the tankman? Was he lifted out of poverty? Or all the other victims of the goverment? Also China capitalism includes things like stealing tech secrets from the companies that manufacture there[0], is that part of the "ideal capitalism" you advocate for?

[0] https://money.cnn.com/2017/08/14/news/economy/trump-china-tr...

dietmtnview• 4 years ago

Capitalism is one of the biggest eradicators of poverty.

wat https://www.youtube.com/watch?v=Co4FES0ehyI

eej71• 4 years ago

If anything, the decline in needing cheap labor is going to be a problem for large countries like China. China needed those cheap labor factories to be the engine to help lift people out of rural poverty.

Unfortunately that engine will now falter and many will be left behind.

For an eye opening survey here, I highly recommend the book Invisible China.

pishpash3• 4 years ago

If they are poorer than people in Vietnam they can just go to Vietnam to work. That's not that much different than going to southern China to work. It is almost a common market.

alephnerd7• 4 years ago

+1 on Invisible China. Scott Rozelle's group at the FSI has been doing some good work on trying to alleviate the opportunity gap that exists in several prefectures in the PRC.

granshaw• 4 years ago

They are well on their way of climbing onto the next rung of the manufacturing ladder and manufacturing more complex items with higher margins that can absorb higher wages

…and transitioning more to a service economy

…no?

koheripbal10• 4 years ago

There is a lot of dishonesty around Westerners complaining about foreign cheap labor.

They claim to be championing labor rights, but they are often just angered at companies for stopping all manufacturing in the West. They see it as an obvious weakness in their ideology that companies can just walk away from their labor movement and go elsewhere.

The obvious truth, and what literally all of these Vietnamese workers will tell you, is that foreign tech manufacturing is an amazingly better paying job than what is currently available.

The true story with China is that moving Western manufacturing to China raised the standard of living for literally hundreds of millions of Chinese people out of poverty.

surfpel2• 4 years ago

There is a lot of dishonesty around Westerners complaining about foreign cheap labor.

This is a strawman.

You're conflating different groups of people with different interests. Some people complain about labor conditions, some people complain that jobs are leaving the country. Almost nobody is "dishonest" about this.

baybal2• 4 years ago

95% of Vietnamese support capitalism: https://eu.usatoday.com/story/news/world/2015/03/13/vietnam-... thus making it the most capitalist country in the world...

Second in line is Bangladesh

P.S. USA had a capitalism approval around 70% in the same survey.

Aunche3• 4 years ago

If you want to decrease inequality, it would make sense for people to be compensated for reducing inequality. This is what exactly what outsourcing is.

LtWorf4• 4 years ago

But now we can't build anything and if china embargoes us, we're doomed.

killjoywashere• 4 years ago

The true story with China is that moving Western manufacturing to China raised the standard of living for literally hundreds of millions of Chinese people out of poverty.

And thereby strengthened the hand of the CCP.

Zigurd• 4 years ago

Assembly plants are just one kind of manufacturing, albeit a very visible part. Petroleum refining and other chemicals are manufacturing. The US does a lot of that.

Manufacturing has been a growing share of GDP for the past few years, interrupted surprisingly briefly by COVID. Just that most of it isn't assembly lines.

wahnfrieden• 4 years ago

I submitted a thoughtful analysis of this recently: https://news.ycombinator.com/item?id=32214320

nyolfen2• 4 years ago

They see it as an obvious weakness in their ideology that companies can just walk away from their labor movement and go elsewhere.

it's true! we can't force anybody to use our labor. but we can control access to our markets.

you don't have to be a union activist to recognize that exporting american manufacturing jobs has been disastrous for our domestic working class.

gerdesj• 4 years ago

I can hire a person here (UK) to do something for £x/hour or £y/unit. I can perhaps hire a person in say Vietnam to do something for £x/n/hour etc.

I don't do this personally but we should explore the possibilities.

The thing about capitalism is it is capitalism. You should drive costs down and profits up. Ideally you don't kill people on the "journey" but hey that's what laws n that jud, errr judiciary ... ... cops/police thing is all about or something.

I own a very small company in the UK. We don't go full on capitalism (whatever that monster really is) We strive to be able to sleep at night.

caycep• 4 years ago

A few thoughts:

-I knew someone who wanted to set up optical and circuit board manufacturing in Vietnam - the few factories they toured seemed to be set up very well. Also frequently with better female/male ratios in management levels (perhaps bc, at least what they were told, Vietnamese culture tends to be more matriarchal than elsewhere). Maybe why also a lot of Japanese electronic makers (Pentax, Nikon) had a bigger presence in Vietnam than expected

-the irony of Western manufacturing and standards of living - (coupled w/ strong policy and incentive support from the ccp) is that Xi Jinping seems to be actively going against perhaps one of the greatest economic partnership of recent times, namely USA/China. I think that is why there is likely going to be a contraction in the Chinese economy, if not already happen due to Zero Covid. If anything brings down the emperor/dynasty this time, it is because the grain ceases to flow (at least borrowing a phrase from an undergraduate Chinese history class...)

nsonha6• 4 years ago

as a Vietnamese, we just laugh when we read about those things, so out of touch with reality. It's very condescending as well, the logic is that developing countries are stupid so whatever deal they negotiate for themself must be at a disadvantage and bad for them. When I read criticism of China in Africa I could not help but asking myself, if these developed countries care so much why don't they invest in Africa so that Africa has choices other than China? The fact is China (and Vietnam mind you) are the very few countries willing to invest in Africa at their own risk. I would not be surprised if one day it's "communist Vietnam"'s turn to be the scapegoat.

hnxx• 4 years ago

That's true, foreign company, from tech company to manufacture company, all of them provides more friendly working environment than China local companies. The workers in Shanghai Tesla work 12 hours a day, and paid less than 1500$ a month, which might be unacceptable for western labors, but even this is much better than other local car manufacture companies.

latchkey• 4 years ago

Quite a few of the factories are actually owned by Koreans... Vietnam is their cheap labor force.

another_story• 4 years ago

And Taiwanese

mattigames3• 4 years ago

Can't shake the feeling that a similar rationality was used to partially justify trading slaves "The new master feeds them bread and milk instead of just rice and water! Its a clear win for them!". Yeah I get it, its an improvement for sure but maybe the problem has roots a bit deeper that must be adressed and therefore righfully critized despite being an improvement.

mgraczyk2• 4 years ago

It wasn't true though. The lives of enslaved people were obviously, measurably worse after enslavement and transportation. They had shorter lifespans, less freedom, literally enslavement, etc. The lives of people groups in African captured for slavery were also worse.

astrange2• 4 years ago

Economics is called the "dismal science" because slavers called the economists that when the economists pointed out slavery was both bad and inefficient.

The slavers' argument was that treating them bad taught them proper Christian character.

Sakos• 4 years ago

China was literally able to lift hundreds of millions of people out of poverty with all the manufacturing that was moved there. I think most people don't understand anything about economics. Vietnam absolutely wants and will benefit from an increasingly industrialized economy.

edit: I'm seeing a number of comments pointing out how these are companies owned by Koreans. Which maybe isn't optimal, but the potential for knowledge transfer coupled with investment in infrastructure and logistics chains is a great opportunity that just needs to be used well.

usrusr• 4 years ago

No doubt about any of that, but China played a really tough game to become more than just a cheap workbench. All those forced joint ventures, and the immense discipline required to make those become more than just easy profit-share for some lucky ones who know the right people. They did a lot of things extremely well to get to where they are now. That won't be easy to replicate. Particularly when one of the partners knows that game so well. It could end as colonization 2.0.

dylan604• 4 years ago

How long before Vietnam pulls a move from China's playbook where they start to manufacture things based on the plans foreign companies brought them and sell the product under Vietnamese company brands?

upupandup5• 4 years ago

hundreds of millions of people out of poverty

This is false because majority of Chinese citizens do not make more than $1000 per year or something very low. The average GDP is something like $6000, which is far below its neighbours. Even the ones that do make more, while not in complete poverty, they are barely live due to expensive housing and cost of living.

thrdbndndn• 4 years ago

I think most of people simply don't know the reality of developing country. They often form ideas that have good intent, but sound very out of touch for people actually from these countries.

biophysboy2• 4 years ago

Manufacturing for export with Western companies was central to China's rise - same goes for Korea, Japan, and Taiwan - but there was more to it than comparative advantage/labor arbitrage. There was a lot of heavy-handed government action: land reform dispossessing wealthy families, aggressive/protectionist state financing, etc.

fiftyfifty3• 4 years ago

I think many of us would be more supportive of outsourcing manufacturing to developing countries if their government aligned more with Western ideals. The fact is many countries, like Vietnam, are still "developing" because they have authoritarian governments that have been oppressing their population to some extent keeping their labor cheap while stunting their economic potential.

We see the problems with this situation right now with Russia and China, whether it's buying oil from Russia or manufacturing in China, we've given these countries enormous amounts of power and influence by essentially funding their regimes. As we can see with the situation in Ukraine and Taiwan these regimes are not our friends or allies, even though we have allowed ourselves to become attached at the hip to them economically. As a western consumer I would much rather see my money either stay in country or go to a country that is a political ally and shares more western political and economic ideals.

bigcat123456786• 4 years ago

Opression is necessary to development. Looking back for the cruelest opressions done by some nations towards American Indian, Asian, African in the early and haydays of industrial revolution.

You are going to see opressions happening again and again in the future as well. It's just a natural process of society development.

koheripbal10• 4 years ago

It would be helpful to characterize them as "democratic" ideals - not "western" ideals. There is nothing intrinsically "western" about human rights.

In fact, calling them "western" ideas is exactly how autocracies belittle them to their people.

larme• 4 years ago

Western ideals like abortions should be illegal?

nsonha6• 4 years ago

authoritarian governments that have been oppressing their population to some extent keeping their labor cheap

to think labor being cheap is the work of the communist party is pretty ridiculous. Authoritarian or not, no government benefits from their citizens being poor (capitalism does). The problem with authoritarian governments is that they are incapable of raising income, not that they do that by intent.

marricks• 4 years ago

By and large, the factory work done by people in developing economies is dramatically better in terms of quality of life and safety than the agricultural work that they would be doing without economic development.

Do you have numbers on how it improved life of Chinese farmers compared to 100 years ago, 200?

When the US went through its industrial revolution we went from people owning farms to basically being owned by the factories boss. Child labor was rampant so we’re ridiculous working hours and blacksmiths and others who were put out of a job basically drank themselves to death.

Someone none of that seems to ever happen in other countries and all we hear about is “how great of an opportunity it is for them to get to build iPhones” odd stuff

hintymad4• 4 years ago

Is cheap labor the driving factor, though? I vaguely recall that the labor cost alone in China has not been the largest competitive advantage as the cost has been increasing steadily over years. Instead, it was the complete supply chain in China that out competes other countries.

Bloomberg also reported an incident: Jobs wanted to change the cheap plastic screen to glass, and Foxconn was able to recruit more than 8000 workers overnight and completely reconfigured their assembly line to fulfill such request. This level of efficiency used to belong to the US. I really hope US can revolutionize its manufacturing for this century.

markdown2• 4 years ago

...This is level of efficiency used to belong to the US.

I doubt that.

andrekandre• 4 years ago

  > Foxconn was able to recruit more than 8000 workers overnight...This level of efficiency used to belong to the US.

is that efficiency or just control/desperation of workers? i'm not sure i'd like to see that come to the u.s...

sumedh2• 4 years ago

Foxconn was able to recruit more than 8000 workers overnight

Isnt that the same company which has suicide nets so that its employees wont kill themselves.

surement3• 4 years ago

This level of efficiency used to belong to the US. I really hope US can revolutionize its manufacturing for this century.

The US consistently increases its manufacturing output through improved automation. US workers are also significantly more productive than other countries', though US labor costs often cancel that advantage.

yieldcrv2• 4 years ago

The interesting thing about the geopolitical context is that Vietnam is also single party Communist country now practicing state capitalism and also has all the trappings of communism such as internment of dissidents, same as China does

But our willingness to never think about it comes from Vietnam’s irrelevance, not the system they practice

akdor11542• 4 years ago

Culturally Vietnam is tending quite pro-west, and yes its govt is single party communist, but nowhere near the levels of authoritarian hell of the CCCP.

JohnJamesRambo• 4 years ago

the factory work done by people in developing economies is dramatically better in terms of quality of life and safety than the agricultural work that they would be doing without economic development

Wait, I think people were much happier and we should go back to an agrarian society and that people are miserable in the dystopia we created, so I need a citation for this.

devoutsalsa• 4 years ago

All other things being equal, it doesn’t make sense to chase expensive labor!

_0w8t• 4 years ago

I read similar things about new factories in Norway like 150 years ago. From our look it was terrible with 11 hours shifts, no vacations, child labor etc. But at that time people who worked there actually preferred that since the alternative was even harder work on farms or in fishery.

supernova87a• 4 years ago

I'm interested to know to what extent this is just assembly of parts imported from China, or whether the real control over things like the M1 chip assembly, secure element, logic board, etc. are also moved to Vietnam? Seems like that's the secret sauce / real proprietary stuff that tells you whether the high value is moving too. (or maybe that is not even in China either)

And do they have the surrounding parts + engineering ecosystems that is so touted as why China is the place to get things built?

wmf• 4 years ago

Apple Silicon is made in Taiwan.

randall• 4 years ago

Wow. Is the geopolitical hedge there with Texas or something?

pishpash3• 4 years ago

It's almost certainly final assembly, and plugged into the supply chain next door.

astrange2• 4 years ago

The other parts aren't all made in China. The displays are made in Japan and Korea.

dirtyid13• 4 years ago

https://www.apple.com/supplier-responsibility/pdf/Apple-Supp...

Ctrl+F 157 from PRC, other countries rarely break 30.

Vietnam has 21 suppliers, most of whom also has (likely primary) PRC operation.

engineering ecosystems

One presumes still need PRC to to build things first and work out kinks - so far only matured manufacturing lines are shifting out of PRC.

zshbleaker• 4 years ago

I was born in China and my family runs factories here for many years.

What you mentioned is true, the absolute majority of the supply chain of the big name companies are still in China, and many of the alternatives in Vietnam are somehow managed by PRC background capital.

However, it’s absolutely a good start. The eco mic crisis raising in China will be like the 1930s in US, if not worse. My family are actively searching for ways to selling out everything and move out the country but it’s clearly prohibited by the Gov. We are worrying it will eventually becomes a new Third Reich in near future, when the supply chain will be completely destroyed.

ksec• 4 years ago

That is only on the surface, you then have to look at companies that are listed elsewhere but are actually Chinese ( A Chinese company listing its HQ somewhere else ), or completely owned by the Chinese Investment.

You then look at rest of non-Chinese owned companies, how many of those are completely dependent on Chinese customers ( If 60%+ of your revenue are from China ) or dependant on Apple ( given this is an Apple Supplier list ) where Apple has a tendency, habit or even a strategic mindset to help Chinese companies into their supply chain as part of its diversification, or cost reduction.

And if people ( as few on HN are already doing ) continue to think Apple relying on Taiwanese company called Foxconn. You may want to do a search on Luxshare or more commonly known as ICT. And see how it started and Tim Cook’s opinion on it. Dating back to 2016.

rednerrus• 4 years ago

China does surprisingly little when it comes to the advanced stuff.

mccorrinall• 4 years ago

smic (partially state owned) is only two nodes behind tsmc and samsung: https://www.tomshardware.com/news/china-chipmaker-smics-7nm-...

elzbardico2• 4 years ago

In terms of semi-conductors, yes. But in terms of industrial machines, chemicals, and pharma, China is an important player and has been advancing by impressive leaps.

chrischen5• 4 years ago

China is the one assembling parts imported from abroad or other parts also assembled there. As far as I know no high value parts are actually made in China, though I’m sure some sub components could also be assembled there.

simonh3• 4 years ago

In fact for most of the iPhone's history the value of components manufactured in the US, and therefore the investment in the US in iPhone manufacturing, was much greater than the value added in China from final assembly.

seanmcdirmid2• 4 years ago

As state before, China is already assembling lots of parts from other Asian countries. Additionally, iPhones are made in special export zones (SEZs), so the parts along with the machinery used to produce an iPhone are all imported without tariff (and even the company doing this is Taiwanese, which embodies a lot of the higher level hardware/production engineering that easily transfers to Vietnam). Consequently, iPhones have to be re-imported into China before they can be sold to Chinese consumers, incurring tariffs at that point. I assume Vietnam has something similar set up.

Saigonauticon• 4 years ago

We do. Furniture companies use it a lot already. You can be licensed to import lumber, manufacture using local labor, and export -- without having a license to sell locally. We don't have SEZ, but do have big industrial / IT parks offering support for foreign enterprise. Some are pretty nice.

Overall, the permitted activities on your business license matter. Getting licensed is usually easier than people think, except a handful of sensitive areas.

A small slice of life: this does make furniture tradeshows sad affairs. You can see great things made in Vietnam, but you can't actually buy any of them. This has improved a lot over the last 10 years, but it's still somewhat of a thing.

AYBABTME10• 4 years ago

I don't really see what the problem is with offshoring. If other people elsewhere want to work for cheaper, then it's fair competition. It's not like protectionism would work long term anyways. And in this particular case, Vietnam is more aligned with the US than China, geopolitically, so this makes a lot of sense.

azinman2• 4 years ago

Because you slowly shift your economy out from underneath you and effectively give it away. In the process you lose the ability to have any of these core competencies yourself.

In the end what’s the point of having cheaper products if no one has a job to buy them.

pishpash3• 4 years ago

But they don't need jobs to buy them, they get dollars printed for them to buy them. If one day the dollar can't be printed without tanking itself, they will also have the jobs that allow them to buy the products.

sfvegandude• 4 years ago

In the process you lose the ability to have any of these core competencies yourself.

Nonsense. The US could obtain the core competencies themselves and indeed will as globalization winds down.

People will never stop coming to the US for opportunity.

licebmi__at__• 4 years ago

Usually nobody has problems with offshoring unless it’s their job that’s being offshored.

chaosbutters314• 4 years ago

2 words: national security. as the world's police and adult, we have to be self sufficient in food, tech, defense, resources, etc

scarface748• 4 years ago

And good luck with that with China holding so much of our debt. Military leaders in the US for decades has been warning politicians that our debt is one of our biggest threats.

siquick• 4 years ago

As the world’s police and adult

I can’t tell if this is parody or not

spaceman_20208• 4 years ago

As the world’s adult

Led by an octogenarian who replaced a septuagenarian man-child.

president• 4 years ago

Nobody does until it affects them personally or unless they have some compassion for others in their country who don't have the same opportunities and skillset as you. Many of the drugged out people on the street without homes or a future could have been hard working factory workers but wealthy people thought it would be better to save a few bucks and boost their own paychecks by offshoring.

AYBABTME10• 4 years ago

Personally I think it's entirely fair if someone in another country is allowed to compete on the world market and provide a service for cheaper. It makes economical sense for them as they'll improve their living standards by quite a lot. So you could say that I have compassion for everyone else in the world who isn't born a US citizen and needs to scrape by from much diminished opportunities to begin with.

The offshoring country indeed loses jobs and the jobless need to handle this situation. Some will end up drugged out in the street. I'd argue that these drugged off people aren't that much the fault of corporate leaders who cut costs by offshoring. I'd say the drugged off people are jointly responsible for their fate, along with governmental policies that offer no social net while also not wanting to take any action to prevent spiraling delinquency.

If you look around the world, not every person who loses their job ends up drugged off and homeless. In many places, people are quite poor and don't end up this way. Most people lose their jobs and turn around and figure something out. And then some people can't deal with the hit and don't have what it takes to handle and end up drugged out in the streets. There's some self responsibility going on here that allows this to go down this path. And there's some social policy at play too. In another country, you could only fall so far down before something makes it harder for you to go further down. Either there's strong social nets, or there's just strong anti-drugs laws, or all kinds of debatable policies.. but many of these policies help prevent people getting so low that they can't come back up.

Why is the poor trade worker in VN, living in a metal shed, able to handle abject poverty with dignity, and then get an offshored job and thrive... but the US worker loses their job, has 10x better economical opportunities than the VN worker but ends up drugged out in the street. This isn't a real argument as there are people heading down a self-destructive path everywhere in the world. But I can't help but think that a lot of self-pity has to do with one's own perceived expectations for higher standards and inability to accept loss.

Ultimately, I can't help but think it's an infantilizing argument to say that the hard working factory workers who become junkies, are junkies because someone offshored their job. Because this supposes that they had no agency into doing anything about it, they were doomed to become junkies. This also supposes that a variety of things could have easily knocked them off the good path. That they were fragile and had no recourse or control over their destiny. If it wasn't a CEO offshoring their job, it would have been some other hurdle. And I don't buy this, I don't think the average hard working factory worker is such a fragile person, whose entirely at the mercy and requires the protection of a patronizing CEO.

qaq• 4 years ago

Problem with offshoring of high tech is that a big chunk of US economy is on the hook to a few authoritarian governments not really aligned with US or the west.

willcipriano• 4 years ago

We offshore, but only the pleb stuff. God forbid you want to get a degree in a foreign country, or import medicine, or a doctor. Ask to do any of those and it's protectionism all day long.

AYBABTME10• 4 years ago

I think it's a pendulum. Wait some decades and centuries and that stuff too will get "offshored" elsewhere. And then move between areas, and so on. It used to be that the Arab world was where all the science and math was done. Now it's the bottom of the food chain. It used to be that the Britts were cheaper and faster at building ships, displacing the Dutch's and becoming the world's leader. Now they can't build anything competitively. It used to be that China was the source of most technology, while Europe was stuck in feudal wars. Then they were outpaced by industrializing nations. Now they're mostly manufacturing and develop limited intellectual property. It used to be that Americans studied in Europe to get a proper education. Now the US has the best universities in the world.

I think resistance to offshoring is a natural reflex that's entirely futile.

55555• 4 years ago

A lot of people here are saying the US and Vietnam are close now. Can anyone fill me in? Last I was aware, there was no extradition, and a museum about the War of American Aggression, etc. I wasn’t aware we even had functioning diplomacy with Vietnam. I guess I should have though because Obama went and ate noodles there with Anthony Bourdain. Serious comment. I thought they hated us since the North won the war.

AYBABTME10• 4 years ago

Well, not exactly allied, but China is a much more real and immediate threat to Viet Nam than the US are. Viet Nam isn't going to be a strategic threat to the US any day, and they have aligned interests in the South China Sea (East Sea for VN). The communist government in VN isn't that "bad" all things considered (heavy quotes). The country could grow in prominence and never become big enough to threaten the US's dominant position.

VN and China have been in constant conflict over the sea they share, and their respective commercial and government ships have been in low intensity skirmishes. VN wants to have access to the seas and be able to extract petrol from there. China wants a clear frontyard to be able to protect their economy and trade. VN is too small to do much about China's navy, but with help from the US, it's a different story. In addition, China did try to invade VN right after the US-VN war, and VN remains highly suspicious of China. Hystorically, VN was a vassal state to China (like Korea) and given the trajectory of things and how China talks to their neighbours, it sure sounds like they plan on treating VN (and everyone else) as vassal states once again if and when they come back to world dominance.

From the US side of things, shifting manufacturing to VN is a way to divest from China. And VN workers/trades are quite skilled, so the products themselves are not bad at all.

So while the VN communist party can't just erase their origin story out from one day to the next and remove all the anti-US propaganda, the geopolitics reality is that VN and the US are naturally aligned against China. And similarly, the VN war was a huge cultural shock for the US and you can't just erase that from people's mind. But then pragmatism is that modern day US and VN's interest are a lot more aligned than they're misaligned. In fact aside for the whole history (conflict), political system (capitalist/communist) and governance stuff (freedom & democracy/authoritarian and single party), I think the US and VN don't have much in term of hurdles. The VN population mostly likes US folks (ignoring drunken bravado) and the US has a large VN diaspora and a guilt trip about the VN war.

gleenn2• 4 years ago

How is no one mentioning that China is threatening Taiwan. If the US ends up in a war with China, suddenly most Apple products would have serious operations problems if not being shut off completely. Cheap labor isn't a bad reason, but this is also a hedge against the heating politics between the West and both Russia and China.

cyberpunk• 4 years ago

If the US goes to war with China, I can imagine Apples supply chain problems won’t be very high on our priority lists…

gleenn2• 4 years ago

No, but it will be priority #1 for Apple, which is why they're opening other plants and not whoever you thin "us" is.

threeseed2• 4 years ago

Also based on recent analysis many countries e.g. China, South Korea have increased exports to Russia including dual use technologies which are prohibited under recent sanctions.

This combined with upcoming war games involving China and Russia shows clearly where their allegiances lie.

So the risk of China being economically punished is not insignificant and Apple is very likely to be caught in the cross-fire if it does happen.

kelnos2• 4 years ago

I have a hard time blaming Southe Korea here. Russia and China are their literal neighbors. If China decided to invade SK, their relationship with the US wouldn't save them.

Russia wouldn't have quite as much military success there right now (given their preoccupation in Ukraine), but it makes sense to keep them happy.

fleddr• 4 years ago

I would be interested in that analysis, as I've read the exact opposite. China will be the sole supplier of many goods for Russians as they have nowhere else to go, but simultaneously China is careful not to overstep bounds as it does not want to upset the US, a trade partner about 10 times more important than Russia. It also stopped/delayed many promised infra investments in Russia.

As for allegiances, China has none. Not with anybody. China has no moralistic or principal allies. It simply does what is best for China, and happily plays all sides all at once.

scarface748• 4 years ago

And how does that help when raw materials still need to come from China and many of the components?

thankful693• 4 years ago

Vietnam is also a communist (which we invaded and got badly defeated btw), dictatorship loving (Cuba, Venezuela, ....) country, whatever you see in China, you also see in Vietnam, media isn't just as vicious with Vietnam. In the other hand, Vietnam have a bright future, they have developed significantly in the last decade, I wish them well.

thankful693• 4 years ago

Truth is not very HN friendly, seems like lol.

spaceman_20208• 4 years ago

If the US and China end up going to war, Apple’s products would be the last of my worries.

ArrayBoundCheck• 4 years ago

I wonder what Gavin Belson is up to. I'm thinking about the episode where Gavin opens up a plant in goldbriar north carolina (Not a real place)

yrgulation7• 4 years ago

At some point we should outsource our armies and perhaps even governments. If a real war starts we can use the services industry, unless we outsource that too. We’ll send the lawyers and software engineers in, and power our cardboard tanks with wood and steam.

I was hoping the pandemic and the war in europe would teach us that electronics, particularly high end, should be relocated to allied countries at the very least.

scarface748• 4 years ago

You’re ignoring the entire dependence on the worldwide supply chain. That’s like Cook making a show of “manufacturing Mac Pros” in the US for Trump when only final assembly was done here.

He did the same dog and pony show in Great Brittain.

yrgulation7• 4 years ago

Well thats the issue. The whole suite of dependencies needs to be moved back, except where impossible - i.e. minerals etc.

Having moved all of this outside the free world we slowed down progress in our own countries. Imagine being forced to come up with cheaper alternatives at home where we’d be with robotics, automation and space mining today. Instead we finance countries that seek to challenge us.

rdbell• 4 years ago

International trade dependency is one of the biggest deterrents to war and often helps countries become allies.

ninth_ant• 4 years ago

Ukraine’s #1 trading partner was Russia, and Russia’s #3 trading partner was Ukraine.

I remember reading the same argument in the 90s, and it seemed to have a lot of merit. But, experience shows us that it’s not correct.

yrgulation7• 4 years ago

Yeah it did exactly nothing to stop the ongoing war in europe and little to prevent china from brutally overtaking hong long. Meanwhile china is openly flexing muscles around taiwan. If anything its us that are deterred from action - see germany and russia.

dmitrygr2• 4 years ago

Commonly held incorrect belief. Educate yourself: https://knowledge.uchicago.edu/record/2005?ln=en

AngryData• 4 years ago

Isn't that like the same thing they said before both World War I and II? That the world and trade was too interconnected so that war couldn't break out.

spaceman_20208• 4 years ago

People are very happy to torpedo economic benefits for national pride and sovereignty.

China has been India’s largest trading partner for many years. Yet when there was a recent border dispute, everyone was willing to forego all economic ties in favor of a conflict.

booleandilemma• 4 years ago

Would it be so bad to outsource the US government to say, Sweden, or one of those other Nordic countries? I feel like they know what they're doing.

Could we at least outsource the NYC MTA to them?

yrgulation7• 4 years ago

Note the term “allied” in my comment. Cooperation, sharing of intel and workload among allies is not an issue in my view. I am not a looney nationalist or protectionist, nor do i have an issue with china or russia or their people, i simply want the free world to end its reliance on countries that will not hesitate to use it against us. Also it would help our economies and overall progress.

dav_Oz• 4 years ago

Well, there is some substantial outsourcing of the army and intelligence services via private (military) contractors [0]. In a world of increasing PPP (Public-Private Partnerships) the line gets very blurry indeed.

One interesting line of thought (I don't share personally (yet) but find compelling as a dystopian possibility) is that the dirty business of censoring/filtering is outsourced by private companies (i.e. Big Tech with their unparalleled outreach: Twitter, Alphabet, Meta ... ) so that governments can wash their hands of it.

[0]https://medium.com/smartaim-tech/war-for-money-leading-priva...

yrgulation7• 4 years ago

I dont want to sound like trump but even a broken clock is right twice a day. We have truly made a joke of ourselves.

Apocryphon2• 4 years ago

We've already been increasing dependence on PMCs, as the Romans did with mercenaries, in our last big war:

https://www.wired.com/2004/07/coalition-of-the-billing/

bigcat123456786• 4 years ago

At some point we should outsource our armies and perhaps even governments.

Chuckled here.

Do you realized that normal American people are being outsourced and they don't have much say to determine the process?

Your words read like a slave joking with fellow slaves: one day our master will outsourcing to some other nations.

That's truly sad analogy.

karpierz2• 4 years ago

At some point we should outsource our armies and perhaps even governments.

Funnily enough, this was how war functioned in Europe between 1500-1750s. Armies were too expensive to maintain, so states hired mercenaries. The problem was that mercenaries wouldn't have any incentive to risk themselves to end things quickly. And when you inevitably run out of money to pay them, in the best case they'd just pack up and leave. In the worst case, they'd loot your city on the way out.

Source: https://press.princeton.edu/books/paperback/9780691027647/ma...

syngrog66• 4 years ago

reducing China risk is wise

iloveitaly• 4 years ago

I wonder how long it will be until Apple is running their own fabs, or at least diversifies away from heavily relying on TSMC. Has anyone seen news to this effect?

frakkingcylons• 4 years ago

I think it's the last thing they would do themselves. Setting up and operating their own TSMC-level fabs would cost Apple:

* tens of billions of dollars

* at least 5 years of time

* most of all: immense effort and focus that could be used elsewhere

erichocean5• 4 years ago

Apple is spending $275B to advance Chinese manufacturing.[0]

They can easily afford 1/10th of that to build a fab that's ready in five years right here in the US if they wanted to. (Las Vegas is ideal, no natural disasters of any kind.)

Hell, they could write a check and buy Intel outright.

[0] https://arstechnica.com/gadgets/2021/12/report-apple-ceo-tim...

pedalpete3• 4 years ago

I think it is more likely that TSMC is diversifying away from building only in Taiwan. They have the expertise. Apple's expertise is engineering, design, and marketing.

They don't own their own factories because that is not their expertise, and they probably don't want to bring that in house.

cronix2• 4 years ago

Designing their own chips in-house wasn't "their expertise" either, a few years ago. You won't expand into other areas unless you at least make it a priority and try.

jakuboboza4• 4 years ago

Isnt TSMC building fabs in USA ?

https://asiatimes.com/2022/06/tsmcs-new-us-fab-sparks-debate...

futhey• 4 years ago

Why would they? They identified the best semiconductor manufacturer, and gave them so much business they basically do whatever Apple wants, and prioritize their capacity over everyone else.

mrweasel• 4 years ago

It seems more realistic that they will move to TSMC in the US, or in the future have Intel fab their chips.

thankful693• 4 years ago

I though we were going to move all those tech factories back home? I mean, we are literally paying for it, at least our taxes are.

pedalpete3• 4 years ago

Outside Paywall - https://archive.ph/pUZc3

azlev• 4 years ago

Same manufacturers in different country. I can't see a big change here.

iambateman• 4 years ago

China to not-China is a big deal.

coffee_beqn3• 4 years ago

Don’t forget Foxconn itself is Taiwanese

kube-system5• 4 years ago

The big change is geopolitical. The US and Vietnam are on good terms.

dijonman2• 4 years ago

Vietnam is the go to destination for stolen Apple equipment. Someone there is already an expert at unenrolling MDM, etc.

Makes sense to move manufacturing capabilities there, they are a step ahead. Perhaps it will result in vulnerabilities being closed.

stereoradonc• 4 years ago

Apple has never been upfront about the extent of manufacturing inside china and other countries.

mulmen3• 4 years ago

In my dad’s lifetime we went from fighting a bitter war with Vietnam to building our most popular consumer electronics there. I wonder what we will build in Afghanistan in my retirement years.

simondotau3• 4 years ago

For previous generations, you could say much the same thing about Germany and the engineering and automotive sectors.

Afghanistan is an inhospitable place that doesn't have inherent qualities such as a skilled population, high population density, logistics channels, shipping ports, or a geography amenable to developing the above. They could become a major minerals exporter (there's believed to be a lot of lithium in Afghanistan, for example) but that would, at best, make Afghanistan more like nearby wealthy oil states.

Gunnerhead• 4 years ago

I appreciate your point of view. What about Iraq? What are your thoughts on that? Seems like it has a bit more going for it than Afghanistan.

ggm6• 4 years ago

If AF was smart, they'd partner with battery makers to value add instead of just shipping lithium out as-is. Better to build value. And, many dry inhospitable places are productive in the right terms, if you understand them. Look at the bone yards: Making good money, letting birds park there.

mulmen3• 4 years ago

For previous generations, you could say much the same thing about Germany and the engineering and automotive sectors.

This is a great point. My grandfather landed on Normandy Beach on D-Day. He told some stories, but not all of them. He also drove a VW Beetle for years with no shame. Swore by them in fact.

My hope for the future is economic cooperation. Best I know that’s the most effective force for peace.

jakuboboza4• 4 years ago

US companies are silently escaping China to limit effects of possible tariffs or even war. Imho this is a strategic move to ensure future.

pm902• 4 years ago

A convergence of many reasons, including the uncertainty caused by locking down entire cities.

TBH its likely that it was a question of when not if this would happen. Will be interesting to see the geopolitical effects of a diversification of manufacturing capabilities. CCP wouldn’t be able to sustain the current export focused model.

jakuboboza4• 4 years ago

China demography is going way down. Within a decade they will lose 200 milion workers and gain 300 million retirees in the pool. That will force a strain on the system plus current mortgage issues and protests already pushing bankrupting cities and PRC to a brink of collapse.

China is going down on its own behest.

88840-88553• 4 years ago

this is rather to limit economic exposure to a war that the US is planning. as now the US war against Russia in the proxy war in Ukraine, Europe and especially Germany will be the main victim.

The US foreign politics is the main evil in the world and the EU is still following the Americans. It is incredible.

We must get rid of all American influence in Europe, ban US tech, ban US military, get rid of the US propaganda, brands, social media.

actionfromafar3• 4 years ago

Here I thought the Ukraine was the main victim and Russia the perpetrator.

dep_b• 4 years ago

I hope you at least got paid for this

jakuboboza4• 4 years ago

Rus-Ukr war isnt a Proxy war between USA and Russia. Proxy war requires both parties to support XY forces from behind while here one of the "sides you mention" is active participant showing its own incompetence and destroying prospects of its most vibrant industries and second is Ukraine. Support of NATO for Ukraine is really really tiny in unbiased view.

Right now it is more of a economic war by EU with Russia. But triggered and forced by Russia. It is beyond real how badly Russia prepped this war, Russia doesnt even know what is the end goal. |

Go back to 20 of Feb 4 days before invasion and tell me WHAT IS THE REAL GOAL on Russian side ? IT feels like pre WW1 e-peen lets make a war because of "reasons" without any real goal.... but even at that time they had more realistic casus belli and any goal.

Lapsa2• 4 years ago

yes, indeed it is incredible

_kbh_8• 4 years ago

We must get rid of all American influence in Europe, ban US tech, ban US military, get rid of the US propaganda, brands, social media.

I'm sure Russia would love this. Fortunately the rest of the world is sane enough to see this war for what it is and not fall for what the Russians want the world to think it is about.

If anything this war will lead to more US basses in the EU not less.

pentae• 4 years ago

If you're going to lowkey troll, you should at least back up your points.

sandstrom• 4 years ago

Still a Chinese manufacturer… (Luxshare Precision Industry)

If it had been a non-chinese company, it would have been a great move. Western companies will need to reduce their reliance on China in their supply chains.

actionfromafar3• 4 years ago

If Apple is playing 4D chess with China, we don't know what moves are possible at this time. This may have been the only acceptable move at this time.

elzbardico2• 4 years ago

And the rest of the world would do better to reduce its dependence on the US Dollar as its reserve currency.

eloisant2• 4 years ago

yes, both are true

rmbyrro• 4 years ago

The world would do better reducing reliance on any fiat currency for reserve purposes.

piokoch• 4 years ago

Step by step. Hard lesson learned from dependency on Russia's oil and gas will hopefully open people's eyes - you can't depend on the hostile regime, even if it occasionally pretends to be a nice guy.

kwanbix• 4 years ago

I think the real lesson is you cannot depend on one single provider. Because even if today is really a friendly one, tomorrow it could become hostile.

trasz15• 4 years ago

So how is China hostile?

Lapsa2• 4 years ago

good plot setup for Forest Gump II

ngcc_hk• 4 years ago

Better to have two not one communist state I guess.

spaceman_20208• 4 years ago

You can buy a Coke from a kiosk inside the tomb complex of Ho Chi Minh :)

Always found that very ironical.

spaceman_20208• 4 years ago

Good for Vietnam. I visited the country in 2016 and fell in love with it, going back two more times. I’ve never seen a more hardworking, yet friendly people. They deserve all the success in the world.

tim333• 4 years ago

Slightly off topic but a youtube "DIY man built his own yacht with scrap materials in just 90 days" https://interestingengineering.com/video/yacht-scrap-materia...

was cool and reminded me of the guys who fixed my scooter in Vietnam for about 30p a time.

spaceman_20208• 4 years ago

Lots of Americans in Vietnam now. Vietnamese people have also seem to have embraced American culture wholeheartedly.

The gastronomic results of the mix have been fantastic. Vietnamese food is already amazing but there are now a ton of food joints that use Vietnamese flavors and southern style bbq techniques for some truly spectacular results.

mike_d2• 4 years ago

I have seen some amazing work with my own eyes. Like buying a rusted farm implement from one vendor in a market and taking it to another to have it sharpened and getting back what was basically a brand new scythe.

But the vast majority of these amazing "look what I built" videos from Vietnam are staged and are actually the work of production companies with teams of people. Here is an expose of the primitive building genre where this got its start: https://www.youtube.com/watch?v=Hvk63LADbFc

LatteLazy• 4 years ago

Lots of manufacturing has been moving to Vietnam (and similar countries) as China is finally running out of low cost labour. This has been happening for at least a few years, more likely a decade I think

https://carnegieendowment.org/2020/06/18/is-vietnam-eating-i...

Vietnam to make Apple Watch and MacBook

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