AirPods maker Goertek to invest $280 Million in Vietnam factory amid Apple’s supply chain diversification

Goertek’s Vietnamese entity, which will manufacture consumer electronics products, from AirPods and smartwatches to virtual reality and augmented reality gear.

Technology firm Goertek announced on Monday its plans to invest up to $280 million in establishing a wholly-owned subsidiary in Vietnam to meet the growing demand for business expansion and long-term operation in the Southeast Asian nation.

The new Vietnamese entity will focus on manufacturing consumer electronics products, ranging from AirPods and smartwatches to virtual reality (VR) and augmented reality (AR) gear. Goertek, a major supplier for Apple, has been selected by the tech giant as one of the main mainland suppliers for its upcoming mixed-reality Vision Pro headset, set to launch in early February.

According to a corporate filing to the Shenzhen Stock Exchange, Goertek highlighted that the project is aligned with the company’s future development plan and aims to leverage local resources in Vietnam to enhance overall competitiveness.

The subsidiary is expected to be established through Goertek’s Hong Kong entity, Goertek (Hong Kong) Co, and is located in the northern Bac Ninh province of Vietnam, which has attracted investments from various South Korean firms.

As part of Apple’s strategy to diversify its production beyond China, several of its suppliers, including Goertek, have been investing in facilities outside of China. This move came in response to disruptions caused by Beijing’s stringent COVID-19 restrictions, impacting Apple’s global sales in the lead-up to the 2022 Christmas shopping season.

Notably, Apple suppliers have collectively invested up to $16 billion to reduce their dependence on China by establishing facilities in countries like India, Vietnam, Mexico, and the United States.

Goertek’s investment in the Vietnamese subsidiary reflects the broader trend of tech companies repositioning their supply chains to enhance resilience and mitigate risks associated with geopolitical and economic uncertainties.