Apple losing appetite for China, plans to move some production elsewhere

The violent protests that shook the largest iPhone factory in the world have apparently changed Apple’s appetite for China. According to a Wall Street Journal report, the company is speeding up plans to shift some production out of the country that dominates its supply chain.

Apple is reportedly telling suppliers to plan for assembly in other parts of Asia, particularly India and Vietnam. The company also hinted at having less reliance on Taiwan-based Foxconn, which runs the Zhengzhou factory at the center of the November COVID-19-lockdown protests.

Counterpoint Research said under normal conditions, this one factory accounts for 85% of production on Apple’s top phone model, the iPhone 14 Pro. And the unrest has caused production delays and shortages just in time for the holidays.

Apple may be looking outside Foxconn to further diversify, but Foxconn is looking to make a change, too. The supplier plans to quadruple its workforce at an iPhone plant in India, according to Reuters.

Both company and supplier are seemingly sick of virus disruptions out of China. Meanwhile, China is starting to lift some of its most crippling restrictions, claiming on state media it is because the virus is weakening, not because of the unprecedented protests seen in the country.

In late November, workers in Zhengzhou clashed with police at the iPhone production plant amid protests over compensation and COVID-19 lockdowns that required workers to live at the facility with no outside contact.

Shortly after that protest erupted, unrest spread throughout the country following a deadly apartment fire in the Xinjiang region, where many believe the lockdown delayed emergency response. Ten people died in the blaze, unable to escape.

The widespread protests that followed in resistance to the Chinese Communist Party are unprecedented since the Tiananmen Square protests and massacre in 1989, putting immense pressure on President Xi Jinping’s zero-COVID policies.