GoerTek, the company responsible for assembling Apple’s AirPods, will be moving production of the items from China to Vietnam.
The news comes as the trade war between the US and China continues to escalate.
At the same time, two other smartphone suppliers, Taiwan’s Pegatron and Cheng Uei Precision Industry, are looking at expanding capacity outside China for similar reasons, although this may not include Apple equipment.
According to a Nikkei Asian Review report, GoerTek asked suppliers involved in the production of AirPods to ship all components and materials to Vietnam, earlier this month.
US President Donald Trump has repeatedly urged the world’s most valuable company to move production back to the US. However, China is Apple’s most important manufacturing base and also sales in the country represent around 20% of its annual revenue.
Hong Kong-based analyst at Yuanta Investment Consulting, James Wei said Apple was at risk given the current trade climate.
“Apple is the most obvious target if China wanted to retaliate on American companies,” he said. “Apple and its key suppliers are without doubt subject to highly uncertain political risks as the trade battle continues to heat up.”
Apple products such as AirPods, the Apple Watch and HomePod won a last-minute exemption on the tariffs, with President Trump saying high tech products, including AirPods would not be subject to the additional fees.