The inscription ‘Designed by Apple in California, Assembled in China’ that the iPhone manufacturer usually stamps on some of its products or on their boxes could stop being a phrase and become a document with several double-sided folios if they had to include all the companies from which the Californian multinational buys parts .

Apple smashes sales records: why the iPhone is selling like bagels again

Michael Mcloughlin

After a year of hiatus, the apple has once again recovered one of its institutional traditions that was left in limbo with the pandemic: the publication of its supplier guide. A thick list where more than 200 companies appear with presences in more than thirty countries, which represent the umpteenth proof of how globalized and interconnected the consumer electronics industry is, as has already been seen in the semiconductor crisis or in the Huawei veto.

China and Apple reinforce their romance

How could it be otherwise, China, nicknamed by many as the great factory of the world, is at the forefront of the rankings. And it is doubly so. On the one hand, in the number of plants or locations of each of the suppliers. Even though there are 200, there are many of these providers that have multiple locations registered. But the great Asian dragon is also at the top of the ‘ranking’ when it comes to companies whose headquarters are in that country. Practically, one out of every four companies on the list has that name. Something that has meant that Taiwan becomes the second course and not the favorite quarry to find its suppliers as has happened until now.

An amount greater than two years ago – last date the document was published – where the volume was closer to 20%. Of course, a higher figure than it had in 2011, when these companies accounted for less than 10%.

Actually the percentages, as can be seen in the different reports that Apple has issued in recent years, remained stable until 2015, when a progressive escalation began to reach current levels, where dependence is greater. Something that has occurred in the midst of a new battle in the trade war between the world’s two leading powers, an economic conflict that worsened with the arrival in 2016 of Donald Trump’s oval office.

Tim Cook, CEO of Apple. Photo: Efe.

Total, there are 12 new Chinese suppliers (twice that of Taiwan) those that entered this list in 2020. This group, among which are companies such as Nanping Aluminum, GigaDevice, Everwin Precision or Tianma Microelectronics, mainly deals with the production of microchips and other precision components.

The apple depends more than ever on these supplies, despite the aforementioned tug of war between Washington and Beijing. One of the reasons that may justify this increase, in addition to the progressive maturity of ‘made in China’ technology, It is the quick recovery of the industrial activity of that country after the stoppage due to the covid-19 after executing probably the toughest confinement on the entire planet.

In the Trump years, Apple has increased its reliance on Chinese ‘ingredients’

‘China Plus One’

But that does not mean that the fate of the entire assembly line has been turned over to these companies. Doing so would have been the closest thing to a toxic relationship. The danger of these types of concentrations It has been evident in the current shortage of chips that is hitting the mobile phone industry, but also others such as the automobile industry, whose miscalculations in the hardest part of the pandemic led them to cancel more orders than they should have done.

A secondary effect of the concentration, for example, of the manufacture of semiconductors in Taiwan is how a historical drought in that country, where the Government has prioritized this industry over irrigation of rice fields, has affected availability and price of these important technological components.

Knowing this and that the production of the iPhone, iPad or their computers are susceptible to delays due to pandemics, natural disasters or attacks or being imprisoned by cross sanctions, the apple has launched a strategy known as ‘China Plus One’. This is a growing practice among Western firms that seek to reduce risk and exposure to these situations and for this they require their suppliers not to be located in a single country, but also to have a foot in other parts of Southeast Asia. such as Thailand or Indonesia.

Avoiding tariffs, catastrophes or border closures are some of the objectives

Apple, for example, asked Foxxconn, one of its main partners, last November to move part of the assembly of its tablets and laptops to Vietnam. Companies like Pegatron or Winstron have also made similar plays in order to avoid diplomatic blockades or border closures, as was suffered during the covid-19 crisis.

But it is not the only reason that justifies. Recently it became known that Apple would take part of the manufacture of its fetish device, the iPhone, to India. The reason is none other than to avoid the taxes imposed by the Government of New Delhi on the importation of technological products from abroad, in a protectionist maneuver that has no other purpose than to douse the local industry of high-end components. The effect? That in 24 months the number of companies based in these places has gone from 19 to 27. If we take a look at the past, in 2015, India did not appear in the records and Vietnam did so testimonially.

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