Apple Makes Plans to Move Production Out of China
The Wall Street Journal reports:
In recent weeks, Apple Inc. has accelerated plans to shift some of its production outside China, long the dominant country in the supply chain that built the world’s most valuable company, say people involved in the discussions. It is telling suppliers to plan more actively for assembling Apple products elsewhere in Asia, particularly India and Vietnam, they say, and looking to reduce dependence on Taiwanese assemblers led by Foxconn Technology Group.

Turmoil at a place called iPhone City helped propel Apple’s shift. At the giant city-within-a-city in Zhengzhou, China, as many as 300,000 workers work at a factory run by Foxconn to make iPhones and other Apple products. At one point, it alone made about 85% of the Pro lineup of iPhones, according to market-research firm Counterpoint Research. The Zhengzhou factory was convulsed in late November by violent protests…. Coming after a year of events that weakened China’s status as a stable manufacturing center, the upheaval means Apple no longer feels comfortable having so much of its business tied up in one place, according to analysts and people in the Apple supply chain….

One response, say the people involved in Apple’s supply chain, is to draw from a bigger pool of assemblers — even if those companies are themselves based in China. Two Chinese companies that are in line to get more Apple business, they say, are Luxshare Precision Industry Co. and Wingtech Technology Co…. Apple’s longer-term goal is to ship 40% to 45% of iPhones from India, compared with a single-digit percentage currently, according to Ming-chi Kuo, an analyst at TF International Securities who follows the supply chain. Suppliers say Vietnam is expected to shoulder more of the manufacturing for other Apple products such as AirPods, smartwatches and laptops.

For now, consumers doing Christmas shopping are stuck with some of the longest wait timesfor high-end iPhones in the product’s 15-year history, stretching until after Christmas…. Accounts vary about how many workers are missing from the Zhengzhou factory, with estimates ranging from the thousands to the tens of thousands. Mr. Kuo said it was running at only about 20% capacity in November, a figure expected to improve to 30% to 40% in December.

Foxconn says it accounted for 3.9% of China’s exports in 2021, the Journal points out.
Yet “A survey by the U.S.-China Business Council this year found American companies’ confidence in China has fallen to a record low, with about a quarter of respondents saying they have at least temporarily moved parts of their supply chain out of China over the past year.”

Read more of this story at Slashdot.

By admin