Apple’S Tech The supply chain highlights the challenges of Chinese dumping

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  • There have been more and more reasons for American businesses to minimize their relationship with China during the past few years. Tariffs imposed by former president Donald Trump. Beijing has a tight hold on Covid. US-China tensions over Taiwan. Political Pressure on Supply Chains to Washington Allies from the “Friend Shore” But as the adage goes, splits are difficult.

The conclusion comes from a Bloomberg Intelligence analysis by Apple, which is looking to reduce its reliance on China. The Cupertino, Calif.-based company has already started production of several iPhone 14 models in India, earlier than usual for new models. And Apple’s biggest supplier, Foxconn Technology Group, recently agreed to expand its manufacturing facility in Vietnam with his $300 million.

But Bloomberg Intelligence estimates it will take about eight years to move just 10% of Apple’s manufacturing capacity from China, where about 98% of his iPhones are made. Many local suppliers, not to mention modern and efficient transport, communications and electricity supply, make it especially difficult to break out of the world’s second largest economy.

“Because China accounts for 70% of global smartphone manufacturing and major Chinese vendors account for almost half of global shipments, the region has a well-developed supply chain that is difficult to replicate, and if it does, Apple could lose access,” said a BI report by analysts Steven Tseng and Woo Jin Ho.

One way he does this is by looking at manufacturers of toys and his t-shirts outside of China. But US technology companies have invested tens of billions of dollars over two decades in building complex production chains to provide the goods essential to the e-commerce boom. Dissolving these ties could take just as long and cause lasting damage to an already ailing global economy.

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