Apple has suppliers all over the world
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New report claims vendor may be developing new technology or new processes, only for Apple — completely legal — give the job to a cheaper company, sometimes leaving the original company bankrupt.
There have already been examples in 2024 that being an Apple supplier is not a good idea. While none of the parties involved have directly confirmed it, it appears that Apple has suddenly dropped two microLED suppliers – — one of them spent $1.4 billion to build a plant for it.
These firms reportedly do not have the right to approach Apple, and presumably this is because termination of contracts was allowed within the contracts. According to The Information, Apple's typical contracts also give it full control and at least shared ownership over every step of the supplier's manufacturing process.
This means that the firm can invest in the development of production technology, and Apple has every right to transfer this process to another firm. The accusation is both that Apple does this and that it does this by transferring information from US companies to suppliers in China.
For example, in 2014, GT Advanced Technologies worked with Apple to create a scratch-resistant screen material. According to AppleInsider, the supplier owes almost half a billion dollars — It attributed all this to Apple's growing demands and refusal to renegotiate the terms.
It is now alleged that after the firm filed for bankruptcy, Apple took the material recipe developed by GT Advanced Technologies and passed it on to suppliers including Hong Kong-based Biel Crystal. Apple also provided detailed information to Lens and subsequently pitted each company against the other to get better prices, according to unnamed former employees.
Apple is accused of helping Chinese display maker BOE ensure the quality of displays produced by Samsung for years. The South Korean company Samsung filed a lawsuit against the Bank of England in November 2023 — although this may have been solely a retaliatory response to the Bank of England's accusations of patent theft.
The accusations against Apple do not make it clear how widespread the practice of using expensive suppliers to create technologies for cheaper and Chinese ones is. However, it is also claimed that Chinese company SeeYa Technologies benefited from this, as Apple reportedly passed it details of how Sony was building the Apple Vision Pro.
In this case, Sony has reportedly refused to increase its production capacity for the Apple Vision Pro, so it is not surprising that Apple will be looking for an alternative.
It is also clear that whatever information Apple shares or transfers to alternative suppliers is entirely within its contractual rights. This is true whether engineers verbally train new suppliers or even provide process documentation.
Perhaps demonstrating that companies have become wiser to Apple, the Bank of England has reportedly been slow to commit investment funds to the new facility. The Bank of England also struck a deal to help Indian company Samvardhana Motherson produce protective glass for the iPhone — and can buy up to 49% of the shares of this company.
This is despite the Bank of England reportedly having a rocky relationship with Apple over unauthorized changes to the production of iPhone screens.
Apple had no comment.
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