Apple: It’s impossible to escape from China!
・5 companies increase in China, increasing dependence on China
・The reality is that companies expanding into Vietnam are Chinese.
We bring you a summary from Hisashi Katsumata’s World View.
Apple’s “de-China”:
Apple is encouraging its suppliers to “de-China.”
1. However, Apple’s move away from China is not progressing.
2. The relationship between Apple and Chinese companies has further deepened.
Although China’s geopolitical risks have been pointed out, Apple’s number of Chinese suppliers has not decreased.
Nikkei Shimbun electronic version (April 30th)
An article entitled ”Apple’s number of Chinese business partners increases, walking a tightrope in US-China conflict” was published.
The number of Chinese suppliers has increased for Apple’s parts procurement and assembly.
APPLE’s latest supplier list:
In 2023, the number of trading companies will be 52, an increase of four companies compared to the previous year.
Amid the US-China conflict over cutting-edge technology, Japan’s dependence on China has increased.
Apple supplier list:
Apple publishes a list of suppliers for all its products every year.
The latest edition lists 187 companies.
Assembly, parts, materials, etc. account for 98% of the total procurement amount.
Increasing number of Chinese suppliers:
From 2020 onwards, Chinese companies will have the highest number of companies by country/region.
1. Apple will further increase its business with Chinese companies.
2. Meanwhile, we will reduce procurement from Taiwan, Japan, the United States, and South Korea.
Manufacturing and development base in China
Chinese companies entered the top supplier list for the first time last year
3. There are 286 bases of Chinese and foreign companies in China.
4. The number of bases in China has increased by 10 compared to 2022.
Representative Chinese suppliers:
1. Sanan Photoden produces light emitting diodes (LEDs) and gallium nitride (GaN).
2. Baoji Thailand supplies titanium and nickel in China.
Even when expanding into Southeast Asia, Chinese suppliers have an advantage.
Apple has no intention of seriously leaving China.
Supply chain shift to Southeast Asia:
Apple is accelerating its shift to Southeast Asia.
1. The number of business partners in Vietnam increased by 40% to 35 companies.
2. The number of business partners in Thailand increased by 30% to 24 companies.
Nikkei Asia analysis:
Chinese companies virtually control companies expanding into Southeast Asia.
1. Of Vietnam’s 35 suppliers, 40% are based in China and Hong Kong.
2. Even if procurement from Southeast Asia increases, it will not lead to a reduction in dependence on China.
This has been reported for a long time.
Chinese companies expanding into Vietnam:
1. Rissho Precision Industry (Lux Share)
Involved in the production of Apple’s wireless earphones AirPods
2. China BYD
Both companies are increasing their production capacity in Vietnam.
Apple’s procurement strategy is in contrast to its U.S. peers.
US Dell:
Dell is aiming to completely eliminate the use of Chinese-made semiconductors and parts.
US HP:
The company instructed its suppliers to “increase production capacity in Southeast Asia and Mexico.”
Hon Hai in Taiwan:
The company has already moved its production functions to India.
However, Apple is just “using India to sell Apple products”
Apple CEO Tim Cook
CEO Tim Cook visited China in March.
1. He met with executives from major suppliers and senior Chinese officials.
2. He also rushed to open a new flagship store in Shanghai.
He also announced the expansion of its research and development division in China.
Chinese expert opinion:
1. If Apple wants to continue to profit from the Chinese market,
2. We need to share the flavor with our suppliers.
Apple values China’s role as a huge market.
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