Mon, January 30, 2023

Apple Diversifying Production Away from China

Apple Diversifying Production Away from China

According to individuals familiar with the discussions, Apple has accelerated its intentions to relocate some of its manufacturing outside China. It has long been the principal nation in the manufacturing chain. They claim to be instructing manufacturers to prepare more carefully for Apple devices production elsewhere in Asia; they are considering India and Vietnam. They also consider lowering reliance on Taiwanese assemblers led by Foxconn Technology Group.

Apple’s transition was hindered by turmoil at a location known as iPhone City. As many as 300,000 people labor in a Foxconn-run factory in Zhengzhou, China. A huge city within a city that makes iPhones and other Apple products. It once made up about 85 percent of Apple’s Pro lineup, according to market research firm Counterpoint Research.

Violent protests erupted at the Zhengzhou factory in late November. The upheaval means Apple is no longer comfortable keeping so much of its business in one place. The expected unrest comes after a year of events undermining China’s status as a stable manufacturing hub.

Apple’s Possible New Strategy Outlook on Production

Drawing from a wider pool of assemblers, even if located in China, is one response from those engaged in Apple’s supply chain. Luxshare Precision Industry Co. and Wingtech Technology are two Chinese firms in line for more Apple business.

Luxshare executives said certain consumer gadget customers were concerned about Chinese supply chain problems. COVID-19 anti-supply chain measures, energy shortages, and other concerns caused the problems. They claim that these customers want Luxshare to assist them in doing more business outside China.

At some point, Apple will assign teams to work with contractors. It must convert its product plans and prototypes into detailed production plans. Managers call this a new product introduction, or NPI.

Apple has asked its manufacturing partners to start looking for ways to do more work outside of China. According to supply-chain experts, if nations like India and Vietnam cannot do NPI as well, they will continue to be relegated to the sidelines. However, slowing global economic growth and sluggish hiring at Apple have made it difficult for the tech giant to recruit employees for new NPI tasks.

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