Apple’s manufacturers are increasingly located in the U.S.—a move possibly prompted by supply chain disruptions during COVID.
Key Details
- The number of Apple manufacturers in the U.S. has increased this year, potentially in response to ongoing supply-chain disruptions in China.
- Apple has just over 180 total suppliers, and now 48 of those suppliers are based in the U.S. That’s 25 more than last year.
- Last year California was home to less than 10 of these manufacturers. Now it houses 30 of them.
Why it’s news
Apple isn’t the only company reconsidering where it sets up manufacturing. Major chip manufacturers are moving to the U.S., largely motivated by new legislation that encourages U.S.-based production.
Despite the growing number of U.S. manufacturers, Apple is still predominantly dependent on East Asian production, especially China.
The pandemic may have changed this dynamic, however. During shutdowns, travel between Apple headquarters in California and Chinese manufacturing plants was difficult. Apple worked through these issues by using live-stream video chatting and depending on local engineers.
But even with these work-arounds, having the ability to drop by someone’s office is a perk that can’t be ignored, especially when showing off new material.
Apple isn’t just moving manufacturing to the U.S. It’s also shifting gears to other Asian countries like India and Vietnam.
Backing up a bit
Decades worth of investment has established a complex supply chain for technology manufactures in China. Moving could cause major disruption to the complicated process.
Despite the difficulty in moving, recent world events, such as the conflict between Russia and Ukraine, serve as a reminder of the dangers of placing all manufacturing in one location.
Adding to companies’ incentive to migrate, U.S. and Chinese trade relations have been tense during the last several years.
Tariffs put in place during the Trump administration, sanctions on Chinese tech manufacturers, and some direction from the Biden administration have indicated a trend against U.S. and Chinese trade.
China’s COVID Zero policy combined with unrest in the region has led to optimism from U.S. firms reaching an all time low. Of companies surveyed by the U.S.-China Business Council, over half have delayed or canceled plans in China.
While some companies may be moving out of China itself, many aren’t moving far. They are shifting to neighboring countries like India, Vietnam, and Indonesia. Even with these shifts, China remains the core production location.
