Recently, everyone should have seen the news that Apple announced a $500 billion investment in the U.S. to revitalize American manufacturing. AI servers and other products will now be manufactured in the U.S. instead of China.
Trump was very pleased with this, claiming it was proof that his tariff policies were effective. Previously, he had stated that Apple products manufactured outside the U.S. would no longer receive tariff exemptions when imported back to the country.
In reality, it’s well known that in recent years, Apple has been shifting its production capacity out of China. For example, iPhone production has gradually moved from China to India.
China once had a 100% share of iPhone manufacturing, but by 2024, this had dropped to around 85%. In the coming years, it is highly likely to fall to 50% or even lower.
The chart above shows data from the past four years regarding iPhone manufacturing distribution. In 2020, China accounted for a staggering 98% of production, while India and Brazil each had around 1%, which was almost negligible.
However, starting in 2022, Apple ramped up production in India and systematically relocated capacity. With Foxconn cooperating by setting up factories in India, the situation changed. By 2023, iPhone production in India had already reached 10%.
By 2024, India’s share had surged to 14%. This means that in just four years, from 2020 to 2024, the number of iPhones manufactured in India may have increased 14-fold.
According to industry analysis, India’s contribution to global iPhone production is expected to surpass 20% by 2025 and exceed 40% by 2027.
Meanwhile, China’s share of iPhone manufacturing could drop below 50% by 2027, as Apple plans to establish factories in Indonesia and other locations. There is even a possibility that some iPhone production will return to the U.S.
Facing the risk of increased tariffs, Apple is likely to take such steps to gain favor with the Trump administration, partially shifting iPhone manufacturing back to the U.S.
As Apple’s supply chain relocates, its contributions to China will decrease, but the amount it takes from China will not.
This is understandable, as Apple’s supply chain in China involves 150 suppliers and over 200 factories. When Apple moves its production capacity, these businesses will inevitably be affected to some extent.
However, Apple’s procurement from China will remain unchanged or even increase if iPhone sales in China continue to rise. In particular, Apple’s App Store fees, which are the highest in the world in China, show no signs of being reduced.
Source: Internet
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