Apple is looking to expand its manufacturing presence in Vietnam, testing MacBook and Apple Watch production.

Apple has been working to diversify its manufacturing process and reduce its dependence on China. The pandemic’s lockdowns highlighted the inherent risks of Apple having its entire manufacturing process in a single country.

According to Nikkei Asia, the company is looking to expand its manufacturing footprint in Vietnam, including the manufacture of its most complex device, the Apple Watch. Despite the complexity of the iPhone and iPad, the Apple Watch presents even greater challenges due to its smaller size.

According to the report, Apple’s efforts include doing production test runs with both Luxshare Precision Industry and Foxconn. The transition is presenting some challenges, however, especially with the MacBook. China has been a hub of computer manufacturing for so long that virtually all of Apple’s MacBook supply chain is located in that country, and the supply chain is already optimized and cost-effective. As a result, moving production to Vietnam is taking longer than might be expected.

Nonetheless, Apple’s focus on Vietnam is a big win for a country looking to establish itself as a center of tech manufacturing.

“AirPods, Apple Watch, HomePod and more … Apple has big plans in Vietnam, apart from iPhone manufacturing,” one of the people with direct knowledge of the situation told Nikkei. “The components for MacBooks have become more modularized than in the past, which makes it easier to produce the laptops outside of China. But how to make it cost-competitive is another challenge.”