A large part of the iPhone Pro series is manufactured in China. However, there have recently been protests about low wages and the Covid 19 restrictions. That slows down production. According to a report, Apple therefore wants to relocate its production facilities to other Asian countries.
In recent weeks, Apple has accelerated plans to move some of its manufacturing out of China, which has long been the dominant country in the supply chain. That's what people involved in the discussions said to the Wall Street Journal. The company has urged its suppliers to plan more actively the assembly of Apple products in other Asian countries, particularly India and Vietnam, and reduce dependence on Taiwan's assembly plants led by Foxconn Technology Group, the company said.
The turmoil at a place called iPhone City helped Apple change course. In this massive city within a city in Zhengzhou, up to 300,000 workers work at a factory run by Foxconn to make iPhones and other Apple products. According to the market research company Counterpoint Research, around 85 percent of the iPhone Pro series was produced there alone.
The Zhengzhou plant was rocked by violent protests in late November. Videos posted online showed workers raging about wages and Covid-19 restrictions, throwing objects and shouting "stand up for your rights!" shouted. The videos show that riot police were present. The location from which one of the videos was shot has been verified by news agency and video verification service Storyful. The Wall Street Journal confirmed the events shown in the videos through interviews with local workers.
After a year of events that eroded China's status as a stable manufacturing hub, the upheaval means Apple is no longer comfortable with tying so much of its business to one location, analysts and Apple supply chain people said. "In the past, people didn't pay attention to concentration risks," said Alan Yeung, a former US executive at Foxconn. "Free trade was the norm and things were very predictable. Now we have entered a new world."
One answer is to use a larger pool of assembly companies -- even if those companies are themselves based in China, the people said. Two Chinese companies eager to win more orders from Apple are Luxshare Precision Industry and Wingtech Technology.
