Apple is considering moving 40 to 45% of iPhone production to India to break away from high-risk China
Most of the iPhones are manufactured in the Chinese factories of electronics manufacturers such as Foxconn, but due to the recent new coronavirus infection (COVID-19), lockdowns, employee protest demonstrations, supply chain disruptions, etc. It is reported that Apple is accelerating plans to move manufacturing bases to India and Vietnam in view of the effects of turmoil.
Apple Makes Plans to Move Production Out of China - WSJ
Inside the Covid revolt at the Zhengzhou 'iPhone City' plant | Financial Times
On November 6, 2022, Foxconn's iPhone manufacturing base in Zhengzhou, Henan Province, China, was locked down, and the supply of the latest iPhone models of the same year, the iPhone 14 Pro and iPhone 14 Pro Max, was significantly delayed . Furthermore, on November 24th, a large-scale protest demonstration by employees occurred due to Foxconn's failure to comply with the promised bonus payment conditions, causing further confusion. Some have speculated that the protests may have been caused by dissatisfaction with the strict lockdown imposed by the Chinese government. Although the lockdown was lifted at the end of November 2022, it is reported that 20,000 out of 200,000 Foxconn employees left the factory due to fear of infection and dissatisfaction with Foxconn.
Apple relies on the likes of Foxconn, also known as 'iPhone City,' and Pegatron, an electronics manufacturer with factories in China, for most of its production, but analysts and people involved in Apple's supply chain say it's stable. As the credibility of China as a manufacturing base continues to weaken, it is not strange for Apple to feel uneasy about having a base in one country.
According to the Wall Street Journal, Apple was experiencing production delays due to lockdown around May 2022, so it was considering temporarily expanding production bases outside of China. However, due to the pandemic, the plan was forced to stop. After repeated lockdowns, Apple is reportedly trying to push back on its previous plans.
People involved in Apple's supply chain say that one way to deal with the current situation where production is concentrated is to deal with more manufacturers. Luxshare Precision Industry and Wingtech Technology are said to be two Chinese companies aiming to expand business with Apple.
According to a person familiar with the matter, Apple is asking manufacturing partners to produce outside of China. According to Ming-chi Kuo, an analyst at TF International Securities, Apple is focusing on increasing production in India, with a long-term target of a few percent to 40% to 45% by 2022. It seems to increase. Foxconn and others have also set up factories in Vietnam, India and Indonesia to spread out production, but they are far from manufacturing at the scale Apple needs and their capacity is a meager compared to China. pointed out by experts.
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