Apple looking for suppliers of crucial components in India, Taiwan, S Korea

Apple is looking for new suppliers for contract manufacturing of crucial components in India, Japan, and South Korea, The Economic Times (ET) has reported, citing people familiar with the development. Notably, Apple is facing delays in government approvals for imports of crucial components from existing suppliers, which are primarily based in China. These components include batteries, camera lenses, chargers, and other equipment required to make iPhones and iPads in India, the report said.

In January 2023, about 17 Chinese companies that supply Apple's devices applied for government clearances in seeking permission to set up manufacturing facilities in India, the ET report said. Fourteen of these companies were granted initial approvals. While the applications of four of these companies were indefinitely delayed, six of them said that they were no longer interested in setting up manufacturing facilities in India. The status of the remaining four companies was unknown, The Economic Times report said.

 

Elaborating on the matter, a senior government official told ET, "The approvals (in January) were only initial approvals. Because most of these companies have Chinese origin, national security is also an issue. Those approvals have to be carefully given. Issues of environmental clearances, which are a state subject, are given by expert committees."

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The fourteen companies mentioned above include camera lens equipment maker Sunny Optical Technology Group and Han's Laser Technology Industry Group, alongside AirPods maker Luxshare-ICT and capacitor chip maker ON Semiconductor Shenzhen China, the report stated.

Apple looking for local suppliers

With the delay in imports due to pending approvals both at central and state government levels, Apple is now looking for suppliers who can set up "just-in-time" supply chains in India to expedite local production of the required components, people aware of the subject told ET.

India-China border tensions

Since most of Apple's component suppliers are based in China, they are unlikely to receive immediate government approvals given the territorial tensions on the India-China border, industry experts said.

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Another senior industry insider told the newspaper that some of these suppliers, although supply crucial components, are smaller in size and thus, may avoid the risk of investing money in a hostile country even if they receive government approvals. The companies need to evaluate the risks involved in such investments.

The approval delays have resulted in Apple contacting companies based in India, Taiwan, Japan, and South Korea. Apple needs vital components such as batteries, chargers, casing units, cables, and others, an expert said.