TOPLINE
Apple is working to increase production of its products outside China, according to the Wall Street Journal, in an attempt to reduce reliance on the nation, where strict Covid restrictions have disrupted business.
KEY FACTS
Apple has informed some of its China-based assemblers of its ambitions, according to the Journal, citing sources with knowledge of discussions.
The company is reportedly eyeing Vietnam or India as countries to ramp up production in, though political tensions between Beijing and New Delhi could make it difficult for Apple’s Chinese contract manufacturers to set up shop in India.
China has long been the hub for Apple production, with factories there churning out more than 90% of the company’s major products, like iPhones, MacBooks and iPads, the Journal reported, referencing analysts.
Apple did not immediately respond to a request for comment from Forbes.
KEY BACKGROUND
A Covid resurgence in China has led to the country reimplementing strict lockdowns that essentially confine residents to their homes for long periods of time. The nation’s “zero Covid” policy has put it at odds with Western countries’ approach of largely living with coronavirus, and led to criticism over whether the lockdown measures are necessary or even humane. Its Covid approach has led to supply chain backups, especially for products moving through the highly populated port city of Shanghai. Western companies have also recently stepped up efforts to distance themselves from China over the country’s reluctance to condemn Russia’s invasion of Ukraine and the forced detention of Uyghurs in Xinjiang.
BIG NUMBER
$8 billion. That’s how much Apple’s sales could tank due to supply chain shortages primarily caused by China’s Covid lockdown policies, the company said in a second-quarter conference call last month.
FURTHER READING
Apple Looks to Boost Production Outside China (Wall Street Journal)
Apple’s Overdependence on China Shows in $8 Billion Supply-Chain Snag (Bloomberg)