Apple’s wide exposure to Chinese manufacturing, notable both for its low costs and rising risks, has receded since the COVID-19 pandemic began, company supply chain data shows, reports Reuters. With the world’s biggest iPhone factory, operated in central China by Foxconn, battling production shortfalls and labour unrest spurred largely by Beijing’s harsh virus containment policies, analysts expect the risks—and Apple’s retreat—to accelerate.
A Reuters analysis of Apple’s supply chain data shows China’s prominence in the company’s global manufacturing is declining: In the five years to 2019, China was the primary location of 44% to 47% of its suppliers’ production sites, but that fell to 41% in 2020, and 36% in 2021.
The data shows how a diversification drive by Apple and its suppliers, with investments in India and Vietnam and increased procurement from Taiwan, the United States and elsewhere, is reshaping the global supply structure, although analysts and academics say it will remain heavily exposed to China for many years to come.