Apple supply chain: COVID problems, India opens, Apple Car? (U)

Apple Park 14 April 2014
c/o Digital Globe 2017

More news from inside the Apple supply chain as COVID-19 hits iPhone production, Foxconn’s Indian iPhone factory begins working again and supplier Foxconn seeks to build a factory in Saudi Arabia.

COVID-19 spike hits Chinese manufacturing

Apple supplier Foxconn has had to temporarily close the iPhone plant in Shenzhen, China as a COVID-19 outbreak is taking place there. It is not known when production will begin again.

Update: On March 16, Chinese authorities gave permission for Foxconn to recommence production so long as employees lived and worked in bubbles, Reuters reports.

Bank of America’s Wamsi Mohan says Apple will be exposed because of the closure, saying the company “has a manageable but significant,” exposure, because the plant is a hub for a “material part of the iPhone supply chain.”

Apple and Foxconn seem to have relocated production. All the same a lengthy shutdown may impact availability of the company’s products, including the iPhone 13. That challenge is likely mitigated as 50% of the world’s iPhones are made elsewhere in Henan province. However, some component manufacturers may also be impacted, creating additional problems.

A lengthier shutdown may generate larger challenges.

“An increased period of shutdowns can cause ripple effects at other components that can create a shortfall in production,” Bank of America said.

iPhone production begins in India

The iPhone factory in India didn’t get off to a great start. Production was put on probation for months following appalling staff treatment. Food, dormitories and dining rooms were not up to the standard Apple expects manufacturers to keep.

Now it seems production at that location, which is owned by Foxconn, begins again in April. The Chennai plant will assemble iPhone 13 there.

Foxconn goes to Saudi Arabia

The final set of news from inside the Apple supply chain is that Foxconn is discussing plans to open a factory with Saudi Arabia and the United Arab Emirates. A report claims the $9 billion factory would focus on microchips, EV components and other electronics.

Foxconn seeks incentives of various kinds to support the project. The company seems keen to invest in new factories across the world as it seeks to build manufacturing infrastructure outside China.

The company last year said it intends building an EV project in the Middle East focused on cloud infrastructure and software for passenger cars. Saudi Arabia continues working to improve digital infrastructure, including heavy investments IoT and smart city deployments. 81 people were recently executed on a range of charges in one day in Saudi Arabia.

Apple parks the Car project?

I’m not convinced the recent rumor allegedly generated by analyst Ming-Chi Kuo has any credibility.

In brief it claims the Apple Car team has been dissolved for “some time”. It also says the team must be reorganized within the next six months to achieve mass production by 2025.

The claim doesn’t seem to gel. In recent weeks  we’ve also heard Apple to be shopping around for manufacturing partners and big investments on the part of some existing Apple suppliers in EV production – including Foxconn’s talks in Saudi Arabia.

I’ve a feeling there is a crossed wire in this report. Perhaps it’s just a move into a different chapter of development? I can though imagine that Apple may be shy of hurrying forward in the current unstable geopolitical situation.

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