Apple is tentatively stepping into more manufacturing in the US

Apple Park headquarters

Apple is slowly adding more manufacturing sites in the United States with a focus on California, as it tries to shift more manufacturing out of China.

Apple released a supplier list for the fiscal year 2021, showing that 48 of its 180 suppliers have moved some operations to the US as of September 2021. The number was up from 25 suppliers in 2020.

Over 30 manufacturing sites were in California, compared with less than 10 in 2020.

Major suppliers such as Qualcomm, Foxconn, and Sony added more production sites in 2021, although the list doesn't mention which states they are located. These companies provide Apple with critical components such as modems, image sensors, and product assembly.

However, the supplier list doesn't mention how much business Apple does with each company or describe what they do. It also contains some errors, and actual numbers may be slightly different than official data.

Supplier officials say these factories tend to be small production lines for testing new products or service-related operations. However, they still play an important role in Apple's supply chain.

China remains the dominant country for Apple's supply chain, hosting approximately 150 out of its 180 suppliers. These suppliers are responsible for making chips, screens, camera parts, and motors.

Some suppliers have already extended production outside China, such as in Vietnam and India. For example, Apple started iPhone 14 production in India a few weeks after its release.

As of August 2022, Apple has tested production of the Apple Watch and MacBook Pro in Vietnam. Foxconn is also planning to invest $300 million to expand its North Vietnamese factory.

Officials say it's helpful to be near Apple's headquarters on certain occasions. Travel has been challenging between California and China since 2020 due to COVID-19 restrictions, although Apple has tried to alleviate some of the burdens through live streaming.

The move is also good for Apple to show that it's working to bring more manufacturing to the US. In August, President Biden signed a law that brings over $50 billion in aid for companies to build semiconductor plants in the country.

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16 Comments

danox

said about 1 year ago

10 to 15 years time frame. Like building a cpu to replace Intel.

waveparticle

said about 1 year ago

Since China still hosting approximately 150 out of 180 suppliers, your conclusion that Apple tries to shift more manufacturing out of China seems an exaggeration or distortion from truth.

tht

said about 1 year ago

Apple really needs to have independent supply chains and manufacturing bases in at least 2 places, preferably 3. They need to race, not ease into it, though I imagine the politics of it makes it untenable.

Global warming is making a lot of places unstable and will be even worse in the future. India, Vietnam, and southern China are all part of Himalayan plateau hydrological cycle, and many of the coastal areas are low lying. They will get the trifecta of, at best, unstable water sources, crazy heat stress and sea level rise. The two big river deltas in Vietnam may not get fresh water in a few decades as it will be sucked up upstream while sea level rise will salt all that valuable rice farmland in the deltas, if not outright flood.

Not a good thing for stable economies and stable countries which are needed for a global enterprise assembling millions of complex electronics devices. Manufacturing bases need to move toward the poles, or if staying, become a closed loop system where water is recycled, power is generated on-site, and maybe even a localized food economy on-site. It’s a race, not a walk.

I’m sitting in an arm chair though, absent any realities or responsibilities. Hopeful Cook will set a trajectory for his successor to fly through.

williamh

said about 1 year ago

tht said:

Apple really needs to have independent supply chains and manufacturing bases in at least 2 places, preferably 3. They need to race, not ease into it, though I imagine the politics of it makes it untenable.

Global warming is making a lot of places unstable and will be even worse in the future.

I agree with the first part but I expect other factors will make this diversification necessary before global warming. What do you think will be a problem first? Sea level rise or Chinese invasion of Taiwan?

tht

said about 1 year ago

williamh said:

tht said:

Apple really needs to have independent supply chains and manufacturing bases in at least 2 places, preferably 3. They need to race, not ease into it, though I imagine the politics of it makes it untenable.

Global warming is making a lot of places unstable and will be even worse in the future.

I agree with the first part but I expect other factors will make this diversification necessary before global warming. What do you think will be a problem first? Sea level rise or Chinese invasion of Taiwan?

Definitely global warming, because I don't think China will invade short of a couple if scenarios. I think global warming is already driving bad outcomes. It's an insidious issue where heat stress subtly, mostly unknowingly, changes people's behavior, where they make decisions that they hope will make their lives better in a quicker manner. That's a recipe for dictatorships and autocracies, not the slow grind of democracies. Global warming is the ultimate long term multi-decadal shift in how we do things, and we humans don't do that, or do it well at all.

China isn't going to invade Taiwan until there is a someone who makes it a de facto dictatorship, like Putin and Russia, and that dictator has lost their strategic senses in a narcissistic vortex. As it is, I think the party knows that invading serves no purpose other than to sacrifice the lives of young men for nothing, while putting their economy in a existential crisis. The other scenario is the US chooses not to defend Taiwan. As long the US prevents a total blockade of Taiwan and continually supplies them, invasion isn't tenable. Meanwhile, I think Foxconn, Pegatron, and TSMC is just going to keep on going, and other companies will pick up the slack. They'll just move the assembly elsewhere.