India production is not going well, Apple moves some iPhone production capacity back to China

On July 23, some media reported that Apple has implemented a “risk aversion” and supply chain diversification strategy in recent years, especially its attempt to shift production orders to India. However, this transformation process has not been smooth sailing. Last year, Indian factories suffered setbacks when assembling iPhone 15. The products were returned due to quality problems and had to take price reduction measures, forcing Apple CEO Tim Cook to personally go to China to adjust the supply chain layout.

In view of the above experience, Apple has quickly adjusted its strategy this year, and some production capacity has been returned to mainland China. Industry giants such as BYD and Luxshare Precision have been included in the iPhone 16 supply chain system and become Apple's new partners.

Foxconn’s production base in Sriperumbudur, India, will start producing iPhone 15 series Apple mobile phones from August 2023. The goal is to shorten the shipping time difference between India and China and achieve synchronization of the supply chains of the two places.

Reports pointed out that Foxconn’s Indian factory followed closely behind the Chinese factory in supplying iPhone 15 series mobile phones to the global market within a few weeks. The production cycles of the two places have been closely aligned. As a result, India even threatened to increase its output value by five times in the next five years. .

In fact, although the proportion of iPhone 15 OEMs in Indian factories is only 10%, there are still many problems. The Indian factory relies on importing a large number of parts and components from mainland China, which affects both quality and efficiency. There are still problems with the iPhone OEM yield rate (only about 50%) and hygiene management (E. coli exceeds the standard) of the Indian factory.

These two problems caused problems when the products were exported to Europe and mainland China, affecting market sales. As a result, Apple decided to respond with price cuts.

With most of the iPhone 16 OEM production capacity returning to mainland China, OEM giants such as Foxconn are actively recruiting new employees and increasing the proportion of spare parts purchased from the mainland. This change has also caused some supply chain manufacturers that originally planned to move to India to waver and choose to wait and see for the time being.

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