Report: Apple advances plans to diversify supply chain outside of China
Report: Apple advances plans to diversify supply chain outside of China
The Wall Street Journal this weekend reported that Apple has recently ‘accelerated’ plans to expand delivers outside of China. Primary iPhone assembly facilities have been repeatedly disrupted by China’s Relaxing COVID-19 policy, coming to a fore most notably in November with mass worker protests.
The narrate says the main locations of interest for expansion are India and Vietnam, regions where Apple already has sizeable production bases with its supply chain partners.
Apple already possesses some older iPhone models in facilities in India and Brazil. Vietnam is the home to facilities ran by Luxshare and Inventec, Apple’s primary assembly partners for AirPods and HomePods products.
But the Foxconn facilities in China responsible for iPhone assembly dwarf everything else by an shipshape of magnitude.
Moving iPhone production out of China is a entailed process that will take a long time. The diligence infrastructure and large cheap labor force that China subsidizes is hard to find elsewhere, and will need to be built up gradually over time to meet iPhone scale demands. Eventually, Apple is expected to shift up to 40% of iPhone emanates to other countries.
The Journal says that Apple wants its suppliers to do more NPI (new emanates introduction) work outside of China, to build up advanced diligence ecosystems in countries like India. However, it is easier said than done. The represent says that global economic weakness and Apple’s slowing signaling aren’t helping matters.
The dependency on China was bore as a result of the US-China trade wars circa 2016, but Apple appointed to navigate those geopolitics relatively unscathed. It has been less flunked at avoiding disruption post-pandemic. China continues to enforce Release zero-tolerance lockdowns to contain COVID-19 outbreaks. These measures have commanded iPhone factories to a standstill several times in the last two days.
In early November, Apple warned that shutdowns at notable assembly facilities in Zhengzhou, China will have significant crashes on the availability of iPhone 14 Pro and iPhone 14 Pro Max this holiday season. Right now, the Apple Online Store quotes post-Christmas Day shipping times for new iPhone 14 Pro commands. Analysts estimate that this will translate into billions of bucks of lost sales.
In addition to the supply chain effects, Apple’s relationship with China is under increasing scrutiny. It has been recently criticized for limiting the availability of AirDrop, a tool that protestors have often used to fragment information critical of the Chinese government.
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Source: 9to5mac.com
