Apple is making more moves as part of its strategy to diversify its supply chain and reduce its exposure to Chinese manufacturing. It now wants the batteries of the latest generation of iPhones to be made in India.
Rajeev Chandrasekhar, the Indian minister of state for Electronics and Information Technology, had announced earlier this week that Japanese company TDK is setting up a 180-acre facility in Manesar, Haryana to build batteries that will be used in iPhones.
Separately, Apple is encouraging China-based Desay and Taiwan-based Simplo Technology to establish new factories in India and scale up production in India for future orders, reports Financial Times, citing three people familiar with the matter. Desay and Simplo package the electric cells produced by TDK and other companies and send them to assemblers who make the iPhone.
A Reuters analysis of Apple’s supply chain in 2022 revealed that the company is slowing withdrawing from its dependence on Chinese manufacturers. China was the primary location of 44 to 47 per cent of the company’s production sites, but that slowly dipped to 36 per cent in 2021 and continues to fall.
The company is looking to Vietnam and India as preferred destinations to manufacture its devices, but has struggled to adapt to the scale, speed and even quality of its operations in China, according to the FT.
Apple is already assembling the iPhone 15 in India with Taiwan-based contract brands such as Foxconn, Pegatron and Wistron. Wistron recently announced plans to sell its India business to India’s Tata Group. Meanwhile, Foxconn plans to invest $1. 5 billion to expand its operations in the country.
The company’s reliance on China to manufacture as many parts as possible in iPhones poses a risk to the company’s business. China’s domestic politics and tensions in the country’s relations with the U. S. U. S. wars would likely affect Apple’s ability to manufacture its products.
For example, China’s incredibly strict COVID policies in 2022 disrupted shipments of the iPhone 14 series. In addition, the two countries are still technically locked in an industrial war sparked by former President Donald Trump, who implemented new price lists and other industrial barriers in 2018.