Effortpost: Apple's Deepening Reliance on China's Manufacturing Industry (Also posted on the Economics Thread)
Source Article:
According to the graph provided, there were 759 Apple suppliers around the world in 2017, increasing to 799 Apple suppliers by 2019. What I found this very interesting was that, despite 2 years of trade wars, analysis shows that Apple's manufacturing dependence on China has actually increased.
Despite tariffs and ensuing rumors of Apple leaving China, Apple's supplier base in China has
grown from 349 to 383 between 2017, and 2019; China's share of Apple manufacturing and suppliers increased from 46% to 47.9%, nearly 2% over the last 2 years.
Meanwhile:
- Apple's supplier base in SEA stayed stagnant at 88
- Suppliers in Japan have decreased from 127 to 125
- Suppliers in the US decreased from 68 to 58S
- Suppliers in the EU decreased from 35 to 32
- Suppliers in other nations (i.e. Brazil and India) decreased from 21 to 18.
Between 2017 and 2019, Apple's supplier base worldwide grew by 40. China racked up the lion's share of this increase (increasing by 34, taking up 85% of Apple's capacity and supplier expansion between these two years). If Apple is supposed to be "fleeing" China due to trade tensions, what then explains their growing dependence on China's manufacturing, even despite two years of trade tensions?
If we want to look purely at assembly, here's something interesting:
Per a Reuter's article:
The article notes:
But the factories outside China are smaller and, in the case of India and Brazil, Apple only uses them to meet domestic demand. Apple’s contract factories inside China, meanwhile, have added far more locations than outside, with Foxconn alone expanding from 19 locations in 2015 to 29 in 2019 and Pegatron going from eight to 12, according to Apple’s data. The new locations come as Apple has added watches, smart speakers and wireless headphones to its product lineup.
Overall, from the graph, we can see that Apple's
assembly capacity in China has expanded from
30 assembly plants in China in 2015 to
52 assembly plants by 2019, growing by
22 assembly manufacturing operations in that time period. India's assembly manufacturing has grown from none in 2015 to
3 assembly plants in 2019. Brazil's Apple manufacturing assembly grew from
1 in 2015 to
2 in 2019, peaking at
3 assembly operations between 2016-17. Apple's manufacturing base in the US has merely stayed on
2 for the past 5 years. China's share of global Apple assembly operations was
91% in 2015, and
88% in 2019. If this is what you call "diversification", well... what do I have to say? Looks like they aren't succeeding well.
