Apple Asks Suppliers to Build Fewer Components Amid Weaker Demand

Citing weakening demand, Apple has asked its suppliers to build fewer components for AirPods, the Apple Watch, and MacBooks for Q1 2023, Nikkei Asia is reporting.

Apple components

“Apple has alerted us to lower orders for almost all product lines actually since the quarter ending December, partly because the demand is not that strong,” said an Apple supplier.

“The supply chain in China is still trying to cope with the latest abrupt policy turns, which brought a shortage of laborers because of the sharp COVID surges.”

China’s tech supply chain is struggling to deal with the challenges of slumping demand and staffing chaos caused by Beijing’s abrupt U-turn on COVID controls.

“It’s very chaotic,” an executive at an electronic component maker that supplies Samsung and Apple told the publication.

“The new wave of COVID surges spread super fast, and most companies found it already makes no sense to quarantine their employees.”

Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis, predicted a “noticeable” impact on manufacturing from the opening up.

“However, it might not last too long if most major cities manage to peak by the end of Chinese New Year,” she added. “In a nutshell, I believe a lack of external demand will be an even more important factor for China’s manufacturing sector in 2023.”

An official from Jiangsu province said that the local government is no longer intervening in factories’ epidemic control measures.