Tim Cook visits the Luxshare factory in 2017. Source: Apple
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Even though it's good After unveiling steps to reduce its dependence on China as a major supplier, Apple has also increased the number of firms it partners with to produce in the region.
By January 2024, Apple's supply chain had spent $16 billion moving out of China, and as of April 2024, 14% of all iPhones are made in India. But according to Nikkei Asia's analysis of Apple's public filings, the company continues to deepen its relationship with China.
“Chinese suppliers have formed the largest camp of Apple suppliers since 2020, with their number increasing to 52 last year from 48 in 2022,” Cheng Ting-Fang and Lauli Li wrote. “The number of manufacturing or development plants in China, including those owned by domestic and foreign companies, increased by 10 to 286.”
At the same time, Apple reportedly used fewer suppliers from Taiwan, the US, Japan and South Korea. By contrast, the number of suppliers in Vietnam grew by 40% to 35 in 2023, and in Thailand by about 33% to 24.
However, the publication claims that approximately 37% of Apple's suppliers in Vietnam originates from China and Hong Kong. These include Luxshare, which makes AirPods, and iPad assembler BYD.
Nikkei Asia reports that the number of suppliers in India remains at 14 in 2023. However, these 14 now include the Tata Group, which is buying iPhone production capacity in the country.
Apple is looking to expand its manufacturing in India, and Tim Cook has also said that the company is looking to strengthen its commitment in Vietnam. Cook said this during a trip to South Asia, where he also said Apple would consider investing in Indonesia and has now spent $250 million expanding an artificial intelligence campus in Singapore.
At the same time, Apple has increased its R&D capacity in China by expanding two laboratories. In March 2024, Cook also stated that China remains critical of Apple.
It's unlikely that Apple would ever be able to leave China completely, even if it wanted to. Meanwhile, the company appears to be juggling both political and logistical pressures as U.S.-China trade tensions persist and Chinese power supply issues and COVID measures have impacted production.
Then Nikkei Asia's reporting is entirely based on Apple's public reports. These documents are submitted annually — and they were different when it came to 2022 rather than the latest 2023. For 2022, Apple cut eight suppliers in China and then added only five new ones.
Also in 2022, Apple increased the number of its Indian supplier firms to 14, up from 11 in 2021.
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