Apple Inc. has initiated a significant shift in its manufacturing strategy by relocating the assembly of its latest M5 Vision Pro headset to Vietnam. This move underscores the company’s ongoing efforts to diversify its supply chain and reduce reliance on Chinese manufacturing facilities.
Transition to Vietnamese Manufacturing
The original Vision Pro, launched in February 2024 and equipped with the M2 processor, was primarily manufactured in China by Luxshare Precision Industry Co., a longstanding Apple supplier also responsible for producing certain AirPods models. In contrast, the updated M5 Vision Pro, set to hit the market on October 22, 2025, is assembled in Vietnam. This change is prominently indicated by the Product of Vietnam label on the device’s packaging.
Strategic Supply Chain Diversification
Apple’s decision to shift production to Vietnam is part of a broader strategy to diversify its manufacturing base. While the company continues to produce the majority of its iPhone models in China, it has been gradually moving the production of other devices to different countries. For instance, most AirPods and Apple Watches are now manufactured in Vietnam, and a significant portion of iPads and HomePods are produced there as well. Additionally, Apple has increased Mac production in Thailand and Malaysia.
This diversification strategy is influenced by several factors, including geopolitical tensions, trade disputes, and the desire to mitigate risks associated with over-reliance on a single country for manufacturing. By expanding its production footprint, Apple aims to enhance supply chain resilience and better navigate the complexities of global trade dynamics.
Vietnam’s Growing Role in Apple’s Supply Chain
Vietnam has emerged as a key player in Apple’s manufacturing ecosystem. The country’s favorable business environment, skilled labor force, and proximity to existing supply chain networks make it an attractive destination for electronics manufacturing. Recognizing this potential, Apple suppliers have been investing heavily in Vietnam to bolster production capabilities.
For example, Goertek, a company involved in the production of AirPods and the Apple Vision Pro, announced plans to invest up to $280 million in a new facility in Vietnam. This investment aims to meet the growing demand for Apple’s products and underscores the strategic importance of Vietnam in Apple’s supply chain.
Similarly, Luxshare Precision Industry Co., which previously manufactured the original Vision Pro in China, has expanded its operations in Vietnam. The company increased its investment in a Vietnamese plant by $330 million, bringing the total investment to $504 million. This facility is expected to produce components such as cables for smart devices, touch pens, smartwatches, and smart positioning tags.
Balancing Act: Navigating Geopolitical Tensions
Apple’s supply chain diversification efforts are not without challenges. The company must carefully balance its relationships with Chinese manufacturing partners and the Chinese government while expanding operations in other countries. This delicate balancing act is further complicated by trade tensions between the United States and China, which have led to tariffs and other trade barriers.
By shifting production of the M5 Vision Pro to Vietnam, Apple aims to mitigate some of these challenges. The Vision Pro, being one of Apple’s lower-volume products, serves as an ideal candidate for testing new manufacturing locations without significantly disrupting overall production.
Implications for the Future
The relocation of the M5 Vision Pro’s assembly to Vietnam signals a broader trend in Apple’s manufacturing strategy. As the company continues to diversify its supply chain, it is likely that more products will see shifts in their production locations. This strategy not only reduces risks associated with geopolitical tensions but also allows Apple to tap into new markets and manufacturing capabilities.
Moreover, this move reflects a growing trend among tech companies to diversify their manufacturing bases. By investing in countries like Vietnam, Apple and its suppliers are contributing to the development of local economies and creating job opportunities in these regions.
Conclusion
Apple’s decision to assemble the M5 Vision Pro in Vietnam marks a significant step in its ongoing efforts to diversify its supply chain and reduce dependence on Chinese manufacturing. This strategic move is influenced by various factors, including geopolitical tensions, trade disputes, and the desire to enhance supply chain resilience. As Apple continues to expand its manufacturing footprint, it is likely that other products will follow a similar path, further solidifying Vietnam’s role as a key player in the global electronics manufacturing landscape.
