How Flexible Is Apple’s Supply Chain?

The Trump administration says Apple could move its manufacturing to the U.S.

Let’s take a look.

Apple’s Global Supply Chain

The Suppliers

Apple mostly designs and sells its iPhones in the United States.

But between the beginning and the end, the 696 suppliers that Bloomberg names on its terminal converge in China. They top their list with Hon Hai Precision. As Apple’s largest assembler, Hon Hai is also known as Foxconn. In addition, coming from 50 countries, the long list ranges from Corning, Texas Instruments, and Sony to Taiwan Semiconductor, Qualcomm, and Cirrus Logic.

The Places

In addition, each manufacturer has its own supply chain. For example, the screen might have traveled to South Korea and Vietnam. Meanwhile, Germany’s Trumpf made the phone’s proximity sensor and Sony did the rear camera sensors. At the same time, the battery that came from MFG in China needed lithium and cobalt from the DRC and Chile. And finally, after a total combined journey of 500,000 miles, they all wound up at the Chinese Foxconn plant that did the FATP “final assembly, testing, and packaging.”

Involving creativity, collaboration, and complexity, we could say that Apple’s global market is a colossal feat.

A U.S. Supply Chain

Austin, Texas

In 2012, Tim Cook announced that the label on Apple’s Mac Pro computers would say “Assembled in the USA.” Made around the world, the last stop would be Austin, Texas. At this point though, we could say it takes a village. After Apple tweaked the design of its screws, on short notice, local manufacturers lacked the capacity to produce them. Even with delays, the parts were not quite right. By contrast, In China it would have been easy. Available around the clock, the Chinese were low cost, flexible, and appropriately skilled. On massive manufacturing campuses, hundreds of thousand of workers could make a lot of parts quickly.

You get the picture. China has the scale, skills, infrastructure, and cost that they did not have in Austin, Texas. Facing a shortage of screws, Apple wound up getting them from China. As for Apple’s Austin expansion, it added 15,000 non-manufacturing jobs.

Our Bottom Line: A Children’s Book

Hearing that it would be simple for Apple to move its manufacturing to the U.S., I remembered Eugene Ionesco’s children’s book, Number 2. Playing with reality, a father tells his daughter that a telephone is called cheese, but then adds that, “Cheese isn’t called cheese. It’s called music box. And the music box is called a rug. The rug is called a lamp. The ceiling is called floor. The floor is called ceiling. The wall is called a door.”

The book is wonderful. I do recommend it.

My sources and more: To start, I suggest these two NY Times articles, here and here, for details about Apple’s U.S. manufacturing attempts. Then, MarketWatch had the Trump facts and Appleinsider and Wired, the iPhone supply chain. Also please note that our featured image came from AppleInsider.