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The billion-dollar project of the Apple partner in Vietnam will not produce the iPhone but another product?
Date: 9/28/2020 9:08:44 AM
In fact, information Pegatron (Taiwan - China) wants to invest in Vietnam has been mentioned by international media since January 2020. On the other hand, Vietnam is not the only investment destination for Apple partners. Pegatron as well as Foxconn have previously announced an investment of $ 1 billion and factories elsewhere.

 Bloomberg reported earlier this year: Pegatron Corp is looking for a site to build a brand new facility in the North. An unnamed source told Bloomberg: "They have rented a facility in Hai Phong city". 

"The move is aimed at moving production away from the company’s main factories in China, where operating costs have risen due to higher labor costs and the US-China trade war," said Tung Tzu- Pegatron’s Chairman, hsien, told the Nikkei Asian Review at the same time earlier this year explaining the intention.

Mr. Tung told Nikkei that China was "no longer the optimal point of production since more than five years ago", adding, "When US President Donald Trump stoned China, the process of diversifying production began. ".

"Indonesian and Vietnamese factories will manufacture Internet-connected devices," Tung said in January. 

Pegatron produces a variety of electronic devices, including Apple’s iPhone, under contract. Pegatron is the second-largest producer behind only Taiwanese company Hon Hai Precision Industry, known as Foxconn.

Pegatron, along with two other Apple iPhone assemblers, Wistron Corp and Hon Hai Precision Industry Co. are all developing production facilities or increasing capacity in Vietnam. None of the three names mentioned above manufacture iPhones in Vietnam at the moment.

Pegatron has just planned to invest $ 1 billion in an industrial complex that produces high-tech products in Vietnam, according to a report from the Ministry of Planning and Investment submitted to the Prime Minister recently.

Specifically, this $ 1 billion will be divided among 3 projects:

- Pegatron Vietnam 1 (total estimated investment capital of 19 million USD): This project was granted investment certificate by Hai Phong Economic Zone Authority on 17/3.

- Pegatron Vietnam 2 (total estimated investment capital of 481 million USD): This project is in the process of implementing investment procedures.


- Pegatron Vietnam 3 (total estimated investment of 500 million USD): This project is expected to be implemented in the period of 2026-2027.

Besides, Petragon also expressed his intention to move a research and development (R&D) center from China to Vietnam at an appropriate time. It is expected that this center will move to around 2026-2027 - along with the implementation period of the Petragon Vietnam project 3.

Vietnam is not alone

Previously, the company submitted its intention to invest about 10-15 trillion rupiah (695 million to 1 billion USD) in a factory in Indonesia to assemble "chips for Apple smartphones", Deputy Minister The Indonesian Ministry of Industry, Warsito Ignatius, said in May 2019.

Pegatron plans to assemble phone chips in cooperation with Indonesian electronics company PT Sat Nusapersada at a plant on Batam Island, Deputy Minister Warsito Ignatius told Reuters.

However, according to KrASIA, industry insiders have said that Pegtaron will not start making Apple parts in Indonesia in the near future. Their collaboration with Sat Nusapersada in Batam involved the manufacture of telecommunications equipment, such as routers.

Besides this partnership, according to Ali Subroto, Director of Indonesia’s IT equipment industry association (AIPTI), Pegatron is also investing in opening its own factory on Batam. However, he said, "We don’t yet know what they’re going to produce there."

Another Apple supplier, Foxconn, said in July that it plans to invest more than $ 1 billion to expand a factory in southern India, according to Reuters. This promises to be the place to assemble the main iPhone lines for Apple in the future. Foxconn is expected to invest in the Sriperumbur factory, where Apple’s iPhone XR is produced, during the next three years.

According to Reuters, Foxconn is said to keep an eye on Mexico to invest in the factory. According to Reuters sources, Foxconn plans to use the new factory in Mexico to manufacture iPhones for Apple. However, another source said that there is no indication that there is any Apple involvement in the Foxconn plan. Foxconn wants to make a final decision on the new factory by the end of this year and the factory to be built after. 

Last month (August 2020), Pegatron was also said to be exploring to move the chain to Mexico, but it was later reported that Pegatron had denied this.

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