By South China Morning Post
15 Of the 52 suppliers added to Apple’s supply chain since 2017, 15 are located in mainland China, an increase of 28.8%. Some of the new suppliers are located in the Shenzhen area, where Apple’s largest contract manufacturer Foxconn has its largest premises, and other suppliers based in China work in factories in eastern Jiangsu. In both the United States and Taiwan, seven companies had been added to Apple’s supply chain during the same period.
Despite tensions between the United States and China, Apple increased the number of suppliers in mainland China
In recent years, Apple has been talking about relocating production from China and has begun produce more expensive iPhone models in India. All locations selected by Apple must be able to deliver supplies to the extent and quality required by Apple. In the Trump years, fearing that the administration would block imports from China, there was talk that Apple would move 20% of the iPhone’s assembly from the country to India or Vietnam.
Apple is adding suppliers located in mainland China to its supply chain
China’s ability to increase Apple’s more suppliers than the United States and Taiwan together are a sign of China’s dominance in high-tech supply chains. The country’s ability to recover from COVID-19 has been a major reason for this. For example, Foxconn’s plant in Zhengzhou has been so busy assembling iPhone units that it has offered cash bonuses to new employees, while Foxconn’s Indian iPhone plant has halved production due to the virus.
Will Wong, an analyst at IDC in Singapore, said: “China’s mature manufacturing industry remains attractive despite tensions between the US and China. However, this does not mean that Apple will stay far from diversifying its supply chain and production. tensions and supply chain disruptions have taught industry not to put all their eggs in one basket. “
Companies in Apple’s supply chain in mainland China include intelligent component manufacturer Shenzhen Everwin Precision Technology, LCD manufacturer Tianma Microelectronics Co., flash memory manufacturer Giga Device and metal supplier Nanping Aluminum. Among US companies Apple
relies on 3M, Intel and Skywork Solutions.
Adding to Apple’s supply chain is always good news for companies that make a list, and companies that are removed tend to weigh on the stock market. Optical equipment supplier Ofilm Group was added to the list in 2017, and Apple announced it dropped it last March after allegedly forcing Uygur Muslims to work for the supplier. Since then, Ofilm’s stock market value has halved.
Apple has yet to come up with plan “B”
While Apple continues to rely on supplies from Chinese companies, technical giant CEO Tim Cook has made several visits to the mainland in an effort to build the relationships that Apple enjoys with suppliers located there. The 200 companies on Apple’s 2020 supplier list receive 98% of what the company spends on materials, product manufacturing and assembly worldwide. 80% of these companies have at least one production facility in mainland China.
Apple has yet to develop a solid Plan B, as the pandemic has shown that no matter how strong a company’s supply chain looks, events beyond the supplier’s control can prove problematic. And even with the Biden regime in power in the states since January, hostility between the two powers continues. Please note that the persons conducting the exhibition have made no effort to remove Huawei from the entity list or to allow foundries using American technology to re-supply chips to Huawei.
On the other hand, the Biden administration removed Xiaom from the blacklist
who appointed the manufacturer a Chinese Communist military company. Former President Trump listed the company during the reduced days of his presidency, and it could have prevented Americans from investing in the company.