Apple recently shifted its manufacturing focus back to China for the iPhone 16 series, despite previously moving production to India. According to Bloomberg, Apple produced $14 billion worth of iPhones in India last fiscal year, but now, the company is refocusing its efforts in China.
Foxconn's Strategic Move
Apple collaborates with Foxconn, a Taiwanese contract manufacturer, for iPhone production. Foxconn has initiated large-scale recruitment at one of its Chinese factories, drawing significant attention to its return. The company plans to invest 1 billion Yuan (about 140 million USD) in the city of Zhengzhou.
This return to China is strategic. The shift provides several advantages, such as a more skilled workforce, enhanced supply chain management, and better infrastructure, which are expected to increase the production yield rate. Reports indicate that the yield rate for the iPhone 15 series manufactured in India was around 50%.
Challenges in India and Vietnam
In terms of the supply chain, Apple has had to import components from China to build iPhones in India and Vietnam, leading to higher transportation and production costs. Additionally, the power supply infrastructure in these countries is less reliable compared to China, leading to frequent power cuts that disrupt production capacity and efficiency.
Liu Xiaoxue, deputy director of the South Asia Research Center at the Institute of Asia-Pacific and Global Strategy of the Chinese Academy of Social Sciences, stated that China offers a comprehensive industrial chain, a skilled workforce, and excellent infrastructure, including a stable power supply. This makes China an ideal production base for multinational corporations.
