Although Apple began looking for a way to become less dependent on China last year, China has overtaken Taiwan to become the Cupertino-based firm’s largest manufacturing base.
According to a new report from the Nikkei Asia, China now boasts more Apple suppliers than any other country. Of Apple’s 200 best suppliers in 2020, 51 were based in China, including Hong Kong, up from 42 in 2018. For the first time, Taiwan loses its lead in this special ranking.
Additionally, Chinese suppliers have also helped Apple increase manufacturing capacity in other Asian countries as part of the company’s strategy of wanting to diversify its supply chain. For example, companies like Luxshare Precision Industry and Goertek are also expanding into Vietnam.
Why, despite Apple’s desire to diversify production, China still remains very important? An Apple supply chain manager answered this question:
Most Chinese suppliers have very similar approaches, offering very low prices. They are willing to accept low-margin business that other suppliers are reluctant to accept. This way, they will gradually be able to level up by working with Apple and can later make more advantageous offers.
Clearly this close relationship between Apple and China has raised concerns about the forced labor allegations in China’s Xinjiang region. Apple, however, assures that it has conducted 1121 supplier assessments in 53 countries, without finding any negative feedback.