Apple is accelerating its plans to shift some of its production outside China and telling suppliers to plan more for assembling the product elsewhere in Asia, particularly India and Vietnam, according to a report in the Wall Street Journal.
People involved in the discussions said that Apple is also looking to reduce the dependence on Taiwanese assemblers led by the Foxconn Technology Group. The recent turmoil at China’s Zhengzhou ‘iPhone City’ plant propels Apple to shift its production. There are as many as 300,000 workers working at the factory run by Foxconn to make iPhones and other Apple products. The factory had earlier accounted for as much as 85 per cent of the Pro lineup of iPhones.
In late November, protests erupted at the world’s largest iPhone factory in central China as authorities at the Foxconn plant struggled to contain a COVID-19 outbreak while maintaining production ahead of the peak holiday season.
In videos posted online, the protesters were shouting “Stand up for your rights!” Riot police were present, the videos show. The location of one of the videos was verified by the news agency and video verification service Storyful, The Wall Street Journal reported.
Foxconn factory in Zhengzhou CHY-NA erupts in violence as workers there protest over covid rules and poor working conditions.
Foxconn manufacture Apple products.
— Holy Troller (@IscoPar5) November 26, 2022
After a year of events that weakened China’s status as a stable manufacturing centre, 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.
Apple has told its manufacturing partners that it wants them to start trying to do more of this work outside of China, according to people involved in the discussions. Unless places such as India and Vietnam can do NPI too, they will remain stuck playing second fiddle, say supply-chain specialists. However, the slowing global economy and slowing hiring at Apple have made it hard for the tech giant to allocate personnel for NPI work with new suppliers and new countries, said some of the people in the discussions, reported The Wall Street Journal.
Earlier in November, problems at the Foxconn plant led Apple to cut estimates for high-end iPhone 14 shipments and issue a rare warning to investors over the delays.
Health officials soften tone, lift lockdowns in some places, incl. Zhengzhou (base of world’s largest iPhone factory)
But Foxconn troubles continue. Employee describes the revolt & brutality from police.
Analysts estimate it’s been costing Apple $1 billion/week @OutFrontCNN pic.twitter.com/VR8GYJGANc
— Selina Wang (@selinawangtv) December 1, 2022
China is further scrambling Apple’s strained supply and highlighting how the country’s stringent zero-Covid policy is hurting global technology firms.