Apple plans to increase production outside China after hard lockdowns – What does this move signify?
Apple has told some of its contractors that it wants to boost production outside China, citing Beijing’s strict anti-China policy, according to the Wall Street Journal.
India and Vietnam, which already make up a small portion of Apple’s global production, are among the countries the company is looking more closely at as alternatives to China, people said.
More than 90% of Apple products, such as iPhones, iPads and MacBooks, are made in China by outside partners, according to analysts. Apple’s strong dependence on the country is a potential threat due to Beijing’s authoritarian communist government and its conflicts with the United States, analysts said.
Any move by Apple, the largest U.S. company based on market capitalization, to focus on manufacturing outside of China could influence the thinking of other Western companies considering how to reduce their dependence on China for construction or raw materials. . Such thoughts intensified this year, after Beijing refrained from criticizing Russia for its invasion of Ukraine and proceeded to harsh lockdowns in some cities to fight Covid-19. An Apple spokesman declined to comment.
Asked about Apple’s supply chain in general in April, CEO Tim Cook said: “Our supply chain is truly global, so products are manufactured everywhere.” He added: “We are still looking at optimization.”
Apple sought to differentiate itself from China before the Covid-19 spread around the world in early 2020, but these plans were complicated by the pandemic. Now the company is pushing again in this direction and is telling manufacturers where to look for alternative areas where they will continue to produce products, according to people involved in the discussions.
The lockdown in Shanghai and other cities as part of China’s anti-pandemic policy has caused supply chains for many Western companies. Apple warned in April that a resurgence of Covid-19 threatens to cut sales by up to $ 8 billion this quarter.
China’s travel restrictions also meant that Apple had restricted shipments of executives and engineers to the country for the past two years, making it difficult to control production plants in person. Power outages last year also damaged China’s reputation and credibility.