Apple manufacturer Pegatron is reportedly set to start assembling MacBooks and iPads in Indonesia, starting next month.
The news comes at a time when more and more people are concerned about a burgeoning trade war between the U.S. and China. Because a large number of Apple’s products are manufactured in China, the possibility of new import tariffs could have a detrimental impact on the company.
Pegatron will start assembling Apple’s MacBook and iPad devices using a local manufacturer in Batam. Batam is the largest city in the province of Riau Islands, Indonesia. Abidin Hasibuan, CEO of the manufacturer PT Sat Nusapersada, didn’t confirm or deny reports.
It doesn’t sound like this partnership will necessarily be permanent, though. Pegatron has reportedly invested $300 million to refurbish two plans in Indonesia. It originally considered investing in factories in Vietnam. However, it selected Batam because of labor availability.
Other manufacturers are doing the same
Pegatron is not the only Apple manufacturer to be looking further afield than China. Foxconn, for instance, has started manufacturing certain iPhone models in India.
Analysts have suggested that problems in China could result in a 30% drop in earnings for Apple. With those kinds of challenges, it’s no wonder that suppliers would be looking to embrace new manufacturing markets as quickly as possible.