In recent weeks, Apple has accelerated plans to shift some of its production outside China, long the dominant country in the company’s supply chain, The Wall Street Journal reports citing “people involved in the discussions.”
Yang Jie and Aaron Tilley for The Wall Street Journal:
[Apple] 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.
The Zhengzhou factory was convulsed in late November by violent protests. In videos posted online, workers upset about wages and Covid-19 restrictions could be seen throwing items and shouting “Stand up for your rights!” Riot police were present, the videos show.
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.
“In the past, people didn’t pay attention to concentration risks,” said Alan Yeung, a former U.S. executive for Foxconn…
Some Chinese youth are no longer eager to work for modest wages assembling electronics for the affluent. They are seething in part because of Beijing’s heavy-handed Covid-19 approach, itself a concern for Apple and many other Western companies. Three years after Covid-19 started circulating, China is still trying to crush outbreaks with measures such as quarantines, as many other countries have returned to prepandemic norms.
Protests in Chinese cities over the past week, during which some demonstrators called for the ouster of President Xi Jinping, suggested criticism over Covid-19 restrictions could build into a larger movement against the government.
All this comes on top of more than five years of heightened U.S.-China military and economic tensions…
MacDailyNews Take: The time to accelerate plans to move production out of China was November 9th 2016, but, hey, six years late is better than never!
It’s smart for both Apple and Foxconn to diversify assembly outside of China. There’s no sense having all of your eggs in one basket. — MacDailyNews, April 2, 2019
India will help power Apple’s growth for many years. – MacDailyNews, January 4, 2017
See also: Tim Cook firmly latched Apple onto China’s CCP teat. What’s his plan for weaning it off? – November 2, 2022
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