Apple is making more moves as part of its strategy to diversify its supply chain and reduce its exposure to Chinese manufacturing. It now wants the batteries of the latest generation of iPhones to be made in India. Rajeev Chandrasekhar, the Indian minister of state for Electronics and Information Technology, had announced earlier this week that Japanese company TDK is setting up a 180-acre facility in Manesar, Haryana to build batteries that will be used in iPhones. Separately, Apple is encouraging China-based Desay and Taiwan-based Simplo Technology to establish new factories in India and scale up production in India for future orders, reports Financial Times, citing three people familiar with the matter. Desay and Simplo package the electric cells produced by TDK and other companies and send them to assemblers who make the iPhone. A Reuters analysis of Apple’s supply chain in 2022 revealed that the company is slowing withdrawing from its dependence on Chinese manufacturers. China was the primary location of 44 to 47 per cent of the company’s production sites, but that slowly dipped to 36 per cent in 2021 and continues to fall. The company is looking to both Vietnam and India as alternative destinations to manufacture its devices but has struggled to reach the scale, speed and sometimes, even the quality of its operations in China, according to FT. Apple already assembles the iPhone 15 in India with help from Taiwan-based contract manufacturers like Foxconn, Pegatron and Wistron. Wistron recently announced plans to sell its India business to India’s Tata Group. Foxconn, meanwhile, plans to invest $1.5 billion to expand its operations in the country. The company’s reliance on China to manufacture most of the components that go into iPhones poses a threat to the company’s business. Both domestic Chinese policies and strains in relation between the country and the United States can affect Apple’s ability to manufacture its products. For example, China’s extremely strict COVID policies in 2022 disrupted shipments of the iPhone 14 series. Also, the two countries are still technically locked in a trade war that was triggered by former president Donald Trump setting up new tariffs and other trade barriers in 2018.
