Apple will reportedly move some iPad capacity from China to Vietnam

Apple is moving some of its iPad production to Vietnam from China after supply chain disruptions stemming from coronavirus lockdowns have contributed to product and parts shortages, Nikkei Asia said Wednesday.

It shows how Apple is trying to manage supply to meet demand from consumers and expand manufacturing outside of China, a process it began to accelerate as U.S.-China trade tensions heightened. The iPhone maker already produces some of its AirPods in Vietnam, for example. The shift to move some iPad production to Vietnam may help it boost iPad revenue.

CEO Tim Cook said in April that the company’s iPad segment had “very significant supply constraints” in the second quarter. IPad revenue was down 1.92% year over year, the only segment of Apple’s business that saw a drop. And Apple CFO Luca Maestri warned of several challenges the company faces in the current quarter, including supply constraints related to Covid-19 that could hurt total sales by between $4 billion and $8 billion.

Apple has asked some suppliers to build up their supply reserves of components such as printed circuit boards and some electronics parts, especially those made around Shanghai, Nikkei Asia reported Wednesday.

An Apple spokesperson did not immediately respond to CNBC’s request for comment.

Read the full report from Nikkei Asia here.

Correction: The Nikkei Asia report was on Wednesday. An earlier version misstated the day.