Apple has a few suppliers in Taiwan that are instrumental in piecing together some of the company’s core devices. A new report from Taiwan now indicates that Apple is taking most of its business to China, leaving some Taiwanese suppliers out to dry.
The move is justified, however, given that sourcing its components from China is significantly cheaper from the company and will consequently help the company boost its profits.
One of the victims of this new move, Catcher Technology, is reportedly taking orders from high-end manufacturers in China to fill the void left by Apple. This company used to make the metal chassis for the MacBook. Catcher lost its business to Chinese vendors Everwin Precision Technology and AAC Technologies.
There is some respite for Taiwan-based companies like Foxconn, Casetek, and Catcher as these companies can comfortably meet Apple’s rigorous demands. So there’s no reason for Apple to sever all ties with these companies as of yet.
Apple’s move to cut costs makes more sense when we consider the fact that it plans to launch competitively priced consumer products like the MacBook this year. Earlier in 2018, we saw the arrival of the low-cost iPad for $329 which has tipped us in the direction that the company is heading in. Although there were reports earlier this year about a cheaper MacBook Air hitting the markets, we haven’t heard much about it since then.
Here’s an excerpt from the Digitimes report:
“With their excellent manufacturing capabilities, many Taiwan suppliers used to rely on Apple orders to support their revenue increases and outperform China counterparts. However, Apple has changed its marketing strategies in recent years and started to introduce more China makers into its supply chains, as the US vendor has no longer stuck to top consumer groups for sales of its devices, becoming more concerned about production costs.”