Apple Restarts Decoupling from China
Amidst China's strict anti-Covid policy, Apple is closely exploring expanding production at it's Vietnam and India manufacturing facilities.
Over 90% of Apple's products are made in China currently, and China represents Apple's second largest sales region but as is often the case, money talks. With Apple updating the market in late April stating that the latest supply chain issues with a $4 billion to $8 billion hit on top line revenue likely for the 3rd quarter.
The population of India is comparable to China (1.38b to 1.4b) however the economies and skilled labor force are not. However Apple appears serious about moving manufacturing elsewhere and being less dependant on a single region. Despite what Apple's CEO Tim Cook said in April, "Our supply chain is truly global, and so the products are made everywhere.” This typical CEO hyperbole, however he also indicated that "We continue to look at optimizing".
Prior to Covid Apple were actively seeking to reduce this dependence when the US / China trade tensions were at there peak, however with travel restrictions in place due to Covid those plans were shelved. But if any move is likely, one would expect India to be the prime target given it's low wages and growing economy and Foxconn the main manufacturer of Apple iPhones has already established a facility in India. However growing this and building the advanced supply chains required for a ramp up of Apple products will take many years.
Private security guards stand at the entrance of a closed plant of Foxconn India, which makes iPhones for Apple Inc, near Chennai, India, December 22, 2021. REUTERS/Sudarshan Varadhan