Over the next few weeks, two giants Apple as well as Google, will release the latest smartphones, intensifying efforts to distinguish new models from previous ones. Of course, the biggest difference that consumers may not immediately notice is that some of these models were not manufactured in China. A small number of Apple’s latest iPhones will be made in India, while some of Google’s Pixel models will be made in India, according to a New York Times report. Vietnam, say sources with knowledge of the matter. The reason for this shift to other countries? Growing concerns stemming from geopolitical tensions as well as supply chain disruptions during the pandemic, which has also affected China in recent years.

They fear that if they become dependent on China, they may find themselves “trapped” as Sino-US tensions escalate over Taiwan.

It is noted that China has for many years been a country of production of high-tech products due to the employment of highly skilled workers and the production capacity of factories that could satisfy the demand for the manufacture of next-generation devices. Now, however, US companies are worried about trade disputes between the US and China during the Trump presidency, which escalated after House Speaker Nancy Pelosi’s visit to Taiwan last month. Companies fear that if they become too dependent on China’s supply chain, they could end up trapped in rising tensions between the two countries over Taiwan.

China remains one of the largest manufacturers of consumer electronics, but not only the production of smartphones has begun to be outsourced. Apple makes iPads in northern Vietnam, and Microsoft sent Xbox consoles to Ho Chi Minh City this year. Meanwhile, Amazon manufactures its Fire TV devices in the Indian region of Chennai. However, in the past, all of these products were made in China. Last Wednesday, China announced that industrial production fell for the second month in a row in August. “The manufacturing empire in China is teetering,” said Lior Suzanne, founder of Eclipse Venture Capital, which invests in start-up hardware and software companies. “More and more capital will flow out of China in alternative directions,” he adds.

Supply chain disruptions have spread across Asia, driving up prices in Vietnam, reviving manufacturing in Malaysia and increasing demand for low-wage workers in India. In the case of China, these shocks are holding back manufacturing activity at a time when the country has experienced one of the biggest slowdowns in economic activity in decades. Recall that during the first wave of the pandemic, several factories in China suspended their work. However, this event upset the plans of many companies, including Apple, which was forced to lower its sales forecasts for this quarter because it could not produce the iPhone. The company then began looking into alternative destinations to offset future shutdowns in China, according to three employees who spoke to The New York Times on condition of anonymity. Vietnam, where AirPods production took place in 2020, was an option that was discussed a lot, according to one employee. Since then, Apple has begun making its watches in the country, moving some of its iPad production there.