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The earthquake in Taiwan will cause problems for a number of Apple suppliers besides TSMC, but the impact on the supply chain is likely not will be serious in the long run due to globalization. Here are some of Apple's suppliers that the company will have to keep an eye on for a while.
Wednesday's earthquake shook Taiwan. This phenomenon has become the largest in the last 25 years. At least nine people were killed and more than 800 were injured as tunnels and buildings collapsed.
This event will have a major impact on many parts of the region, and businesses will almost certainly suffer. Since part of Apple's supply chain operates domestically, it also faces the prospect of mitigating component supply disruptions.
One of the major impacts that Apple will feel will be TSMC, Apple's semiconductor partner. TSMC supplies Apple Silicon for almost every device Apple ships.
After the earthquake, the company stopped production lines and evacuated part of its enterprises.
Although TSMC is the main company that comes to mind when you think of Apple suppliers operating in Taiwan, there are other companies that may feel the effects of the earthquake.
Apple's supplier list, which accounts for 98 percent of the company's expenses, includes 41 companies that have Apple-related manufacturing somewhere in Taiwan. It is likely that many of them will be affected by the earthquake in one way or another, at least temporarily.
Saved by globalization?
The earthquake will be a major disruption to Apple's business in Taiwan, but it can be argued that Apple's supply chain will not be completely disrupted due to this event.
Due to Apple's extensive supply chain system, as well as the globalized nature of modern manufacturing, it is highly likely that the supply chain will be able to work around disruptions.
Although some of these companies operating in Taiwan are smaller suppliers of specialized components, there are also many larger companies that have operations in the territory.
These same large suppliers tend to have operations outside of Taiwan itself. For example, TSMC has facilities in Shanghai and the United States, as well as Taiwan.
In such situations, it is likely that other subsidiaries of these larger enterprises will take advantage of the weakness caused by the failure of their Taiwanese counterparts.
This does not mean that supply disruptions cannot be avoided. It takes time for companies to move production between locations, reconfigure production lines, and increase production.
The following is information about Apple's five main suppliers (excluding TSMC) that operate in Taiwan, what they make, and where else they operate.
Broadcom
Semiconductor maker Broadcom is best known for producing chips and similar components for the electronics industry. As an Apple supplier, it supplies iPhone makers with elements used for wireless charging, such as MagSafe in the iPhone and Apple Watch, as well as Wi-Fi.
Broadcom Offices
The supplier list states that there are offices in Taiwan and Singapore, as well as Colorado and Pennsylvania in the US.
Corning Incorporated
Corning is best known for making glass, and Apple's product line may have one of the most important public roles of all.
As Apple's glass supplier, the company creates the transparent panels that make up the front of the display and the back of the iPhone, as well as iPads and other items in the Apple ecosystem.
Corning is a well-known supplier of glass for smartphones.
In addition to its plant in Taiwan, Corning operates a plant in Chungcheongnam-do, South Korea, as well as in Fujian, Jiangsu and Zhejiang in China.
Outside of Asia, the list of suppliers includes facilities in Kentucky and New York. However, it is unlikely that they will be used to help the Asian-centric base of Apple's supply chain system.
Largan Precision
Largan Precision is a smartphone camera lens supplier that provides lenses for Apple to use in its cameras. mobile devices. Most recently, this included the tetraprism lens used to increase the zoom level in the iPhone 15 Pro Max.
Largan Precision produces camera lenses for the iPhone
Of this group, Largan has the smallest number of regional production facilities: Taiwanese production is accompanied by lines operating in Guangdong, China .
With such a small number of locations, it is likely that any closure of production in Taiwan will impact Largan more as it will have to rely on its China facility to keep up with any orders.
Micron
Micron is a computer memory manufacturer that makes chips used for both short-term memory applications and mainstream flash memory. storage for devices. Given the high utility of memory and flash chips in electronics in general, they are naturally widely used throughout the Apple ecosystem.
Micron makes memory and flash chips
Although Micron is headquartered in Boise, Idaho, its suppliers of interest to Apple are located in Asia. . These include Taiwan, Singapore, Shaanxi in China and Hiroshima in Japan.
As a memory manufacturer, Micron's production disruptions in Taiwan could have a larger impact on the industry, especially since memory is so important to computer-related manufacturing.
For example, the tsunami in Japan in 2011 forced many companies to cease operations as the region recovered. This included the closure of memory suppliers, which subsequently impacted global supplies and prices over an extended period.
Texas Instruments
As a semiconductor component manufacturer, Texas Instruments is part of Apple's supply chain, providing smaller components for a variety of applications. For example, it has previously been associated with chips used in OLED, USB and VCSEL laser driver arrays.
Because Texas Instruments has an extensive history in electronics manufacturing, as well as a wide range of components produced, it is to be expected that Texas Instruments has multiple manufacturing facilities around the world. Many of them are listed by Apple as being involved in its supply chain.
In addition to Taiwan, Texas Instruments supplies Apple products from facilities in Benguet, Central Luzon and Pampanga in the Philippines. There are also facilities in Fukushima, Ibaraki and Niigata in Japan, Malacca and Selangor in Malaysia, Singapore and Sichuan in China.
Outside of Asia, Texas Instruments' Apple supply centers are located in Maine and Texas and Bavaria, Germany.
Apple supply chain resilient, but not invulnerable
National disasters by their nature present large challenges that companies cannot easily plan for. There's a reason they're called “Black Swan” events.
They also often need a lot of time and resources to get things back to normal, both locally and internationally.
Apple's production expansion will help the company's production lines avoid some of the impact of temporary capacity declines in Taiwan. Sustainability is simply due to the fact that leading suppliers have facilities in other countries around the world.
This will not provide much benefit for components supplied by small businesses without transnational manufacturing capabilities. This means that some parts of the supply chain will inevitably be constrained unless an alternative is found.
That is, unless Apple's supply chain runs out of the components it already has for its existing production facilities.
A large company like Apple should learn from this experience and use it to make its supply chain more resilient to problems. It is already working to minimize the likelihood of anything major affecting its significant China-focused production by setting up similar bases elsewhere.
The coming weeks and months could bring a storm that Apple's manufacturing efforts will have to weather. But thanks to its scale, extensive supply, well-trained suppliers, and efforts to protect itself from harm in a variety of ways, Apple should easily move into calmer waters.
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