Apple and numerous other businesses rely significantly on China to manufacture their goods, but this has recently proven to be problematic due to the nation’s implementation of lockdowns and other political restrictions that have an impact on these businesses’ ability to produce their goods. Apple is now diversifying its suppliers and will increase purchases from a Taiwanese manufacturer in an effort to lessen its reliance on China.
Taiwanese firm AOET to supply Apple with lens components for iPad
The second half of 2023 will see the start of AOET’s lens shipments for the iPad, according to TF Securities analyst Ming-Chi Kuo. At the moment, AOET is the main source of lenses for the Mac. The analyst speculates that AOET “could follow in the footsteps of Sunny Optical,” which initially supplied components for the iPad before receiving orders for components for the iPhone.
Benefiting from the new iPad orders, AOET’s revenue and profit in 2H23 could grow YoY amid the recession. Looking into the mid-to-long term, AOET could follow in the footsteps of Sunny Optical’s growth in Apple’s lens supply chain by first getting iPad orders, then increasing the supply ratio of iPad orders, and eventually obtaining iPhone orders.
In Kuo’s opinion, Apple intends to employ AOET, a Taiwanese business, to carry out its long-term strategy of reducing reliance on Chinese suppliers. Apple has been gradually moving its production line to foreign nations.
According to numerous rumors from December, Apple is considering assembling the iPad for the first time in India, where it already makes the iPhone. Apple was reportedly holding discussions with Indian officials about moving some of its iPad production to the region. Although no “concrete plans” have been made as of yet, the move could help the tech giant significantly expand its footing in the region
China has implemented strict lockdowns and a “zero-COVID” policy since the start of the COVID-19 outbreak. This has caused numerous factories nationwide to close their doors for prolonged periods of time, which has affected the availability of their products to businesses like Apple. The supply of parts for electronic products is also being challenged by political tensions between China and Taiwan.
Apple is also interested in reducing its dependency on Foxconn Technology Group companies. As of right now, Foxconn is responsible for assembling more than 90% of global iPhone shipments.