SAG: Vietnam Holds 62% Of AirPods Production As India Quadruples Share To 4%

Apple's AirPods are now built in three places. The share each country holds tells the story of where consumer electronics manufacturing is going next — and which country still has its hand on the back of the chair.In the first quarter of 2026, Vietnam manufactured 62 per cent of global AirPods shipments, China 34 per cent, and India 4 per cent. That is per Smart Analytics Global's Wearables 360, in a tracker note published on 21 May 2026 by Abhilash Kumar, Lead Research Advisor (Director).The single most interesting number on that scoreboard is the smallest one.India's share moved from zero in 2024 to one per cent in 2025 to four per cent in Q1 2026 — a quadrupling inside a single quarter. For a product line that was, until 2023, built entirely inside Greater China, that kind of grid climb gets noticed in Cupertino.Apple AirPods Manufacturing Share by CountryCountry20242025Q1 2026Vietnam516462China493534India014All figures are share of global Apple AirPods TWS manufacturing, in per cent. Source: SAG Wearables 360, May 2026.Vietnam took the front row, then held itVietnam's run to the front happened in 2025. Its share of AirPods manufacturing went from 51 per cent in 2024 to 64 per cent in 2025, before easing to 62 per cent in Q1 2026 as India started peeling away small bits of order volume.The factories sit in northern Vietnam. Luxshare ICT and Goertek run the main assembly lines for Apple's wireless earbuds. Both are Chinese-origin firms that followed Apple across the border when the China-only model began to crack under tariff pressure. Northern Vietnam offers two structural gifts. Road-and-rail links to the southern Chinese component belt that supplies the magnets and acoustic modules. And the deep-water port of Hai Phong for export sailings to the United States and Europe.Vietnam is the lead actor on the AirPods stage. The script is still written next door.China kept the props, the wardrobe, and the magnet shopChina's assembly share dropped from 49 per cent in 2024 to 35 per cent in 2025 and to 34 per cent in Q1 2026 — a 15-point fall across roughly five quarters. The country no longer dominates final assembly the way it did until 2023, when Luxshare, Goertek and Inventec ran most of the AirPods lines from Shenzhen and Dongguan.What China kept is more interesting than what it lost.Every AirPod contains rare earth magnets — neodymium-iron-boron alloys for the driver assembly, with dysprosium added so the magnet keeps its strength at higher operating temperatures. China still produces roughly 70 per cent of the world's heavy rare earths and refines almost all of the dysprosium that ends up inside high-performance consumer electronics. Australian miner Lynas Rare Earths shipped a combined eight tons of dysprosium and terbium in Q1 2026 — the only meaningful non-China source — against annual global demand running into the thousands.That is the chess position China still holds. The assembly lines are pawns. The magnet supply is the queen.The cost of that position showed in July 2025, when Foxconn Interconnect Technology's Telangana facility started running short of dysprosium after Beijing tightened export licensing for seven medium and heavy rare earth elements in April. Foxconn's Indian unit went to the Ministry of External Affairs for an end-user certificate, sent it to the Chinese embassy, and waited 45 days for sign-off. In the meantime, the Hyderabad lines ran on existing stock. Production at the plant slowed for a few weeks before exports resumed.Beijing paused the bulk of the October 2025 expansion of those controls in November after the Xi-Trump meeting in Busan, but the April 2025 controls remain on the books. Apple's AirPods supply chain runs on a one-year regulatory window that closes again in November 2026.India quadrupled its share — and the Hyderabad story is whyIndia's AirPods journey starts in May 2023, when Foxconn's chairman Young Liu shook hands with Telangana on a $500 million investment in Kongara Kalan, fifteen kilometres from Hyderabad airport. KT Rama Rao, then Telangana's IT minister, said the build was happening at "Telangana Speed". The phrase stuck.Commercial AirPods production began at the FIT factory in April 2025. By the end of 2025, Foxconn was making about 100,000 pairs of AirPods a month at Kongara Kalan, employing 2,000 people across five assembly lines. That fed the one per cent global share SAG recorded for India in 2025.The acceleration came at the end of 2025. Foxconn confirmed it was refitting the five existing lines, shipping new machinery in from its Vietnamese operations, and pushing monthly output to 200,000 units by early 2026. Total committed investment at the plant hit Rs 4,800 crore, of which Rs 3,000 crore had already been deployed by October 2025. Headcount was set to climb from 2,000 to 5,000 inside six to eight months. The expansion covers the AirPods 4 launched in September 2024 and the AirPods Pro 3 launched in late 2025.That capacity doubling is what shows up in SAG's Q1 2026 print as the move from one per cent to four per cent.The Indian government is now writing cheques to the magnet shopThe longer-term India story sits inside the Electronics Components Manufacturing Scheme, notified by MeitY on 8 April 2025 with an opening outlay of Rs 22,919 crore. The scheme runs for six years and pays out turnover-linked, capex-linked or hybrid incentives to companies building electronic sub-assemblies, bare components and capital equipment inside India — categories that together account for roughly 90 per cent of the bill of materials for a modern smartphone or a pair of AirPods.The Union Budget for 2026-27 raised the ECMS outlay to Rs 40,000 crore.By December 2025, investment commitments under the scheme had reached Rs 1.15 lakh crore — nearly double the initial Rs 59,350 crore target. The Cabinet has approved two tranches of projects so far: seven in October 2025 worth Rs 5,532 crore, and seventeen more in November 2025 worth Rs 7,172 crore. India's plan is to make the camera modules, the multi-layer PCBs, the resistors, the capacitors and eventually the magnets that go into devices it currently assembles for Apple, Samsung and a long tail of brand owners.If the scheme delivers on its targets, India will move from being the cheapest set of hands in Apple's supply chain to owning some of the inputs. That is the difference between four per cent assembly share and being structurally indispensable.Why Apple is splitting the work three waysCupertino's strategy has been visible since 2023, but the Trump tariff regime turned a slow rebalance into an urgent one. In April 2025, the second Trump administration's reciprocal tariff schedule sent Apple scrambling to shift iPhones sold in the United States to Indian-made stock. Tim Cook told analysts on the company's May 2025 earnings call that tariffs would add roughly $900 million to costs in the June quarter and that he expected the majority of iPhones sold in America to carry India as their country of origin by the end of 2026.AirPods are the second wave of that same play. The product is smaller, lighter, easier to airlift, and easier to set up new lines for. It also runs on a magnet supply chain that crosses the same rare earth chokepoint as electric vehicles and wind turbines — so Apple's exposure is the broader US industrial economy's exposure in miniature.Splitting AirPods production across three countries solves two problems at once. It hedges against any single government weaponising tariff or licensing policy, and it gives Apple a second pricing lever when it negotiates with Luxshare and Goertek over the next refresh cycle.What the four per cent leaves outIndia's share will keep climbing through 2026 as the Hyderabad lines hit 200,000 units a month and ECMS-backed component suppliers come online. SAG's Q2 print will probably show India in the mid-single digits. By the end of 2026, a 6 to 8 per cent global share looks reachable on the Foxconn ramp alone.The harder gap is what India still imports to build the AirPods it now exports. Magnets, charging chips, MEMS microphones, balanced armature drivers and assembly tooling come in from China, Japan, South Korea and Taiwan. The four per cent assembly share rests on a near-100 per cent import dependency for inputs. Closing that gap is the ECMS bet — and the bet has a clock on it, because the next round of rare earth controls is one diplomatic incident away.The grid order at the front of the AirPods race looks set for 2026. Vietnam will hold its podium position. China will keep slipping on assembly while keeping its grip on the magnet shop. India will keep climbing — fast enough to matter, still slow enough that anyone betting on a 20 per cent Indian share before 2028 is reading the calendar wrong.The race that actually matters is not for the assembly podium. It is for the rare earth refinery that sits behind it.end of article