Apple Accelerates iPhone Production Shift from China to India
Apple is making significant moves to transfer a substantial portion of iPhone production to India, seeking to reduce its reliance on China, Nikkei Asia is reporting.
The company has requested its suppliers in India to manufacture over 15 million iPhones this year, more than double the target set a year ago. This shift is part of a larger tectonic change in Apple’s manufacturing supply chains.
Previously, the time to produce a new iPhone in India was a year longer than in China. However, the gap has significantly narrowed, and the goal for this year is to reduce it to less than 10 days.
The expansion of production in India is not only a massive strategic undertaking for Apple but also for the numerous companies involved in supplying parts for iPhones.
China has been a central hub for Apple’s production, with more than 80% of its top 188 suppliers operating at least one manufacturing facility in the country. Since the launch of the iPhone in 2007, China has accounted for over 95% of global iPhone production, according to supply chain analysis.
However, the exclusive dependence on China is coming to an end due to political and commercial reasons.
Apple has instructed suppliers to prepare for producing at least 20% of the total annual iPhone production in India in the coming years, aiming to reduce its current proportion, which stands at less than 10%.
Apple intends to deepen production in India by moving beyond routine assembly tasks and making more intermediate parts, such as metal casings, in the country.
Additionally, the company plans to bring crucial new iPhone product development resources from China to India, including thousands of engineers and the establishment of new laboratories.
The catalyst for Apple’s move towards India was the unrest in Zhengzhou, China, home to the company’s largest iPhone assembly hub. An outbreak of COVID-19 at Foxconn plants in the area led to protests among workers, disrupting production for over a month during a crucial shopping season.
However, the decision to shift production to India is not solely in Apple’s hands. Hundreds of suppliers are involved in manufacturing the approximately 1,500 components that go into an iPhone.
The success of the move depends on the decisions made by these suppliers, who must build new capacity in India or ship their products from elsewhere for assembly.