Tapping factories in Brazil and India has not lessened Apple Inc’s dependence on China, the company’s supply chain data shows, raising the stakes for the iPhone maker as U.S. President Donald Trump wages a trade war and promises more tariffs. Apple faces levies of 15% imposed by Trump’s administration on major products made in China such as smartwatches and wireless headphones on Sept. 1, with a tariff on its biggest seller, the iPhone, to take effect on Dec. 15.
Contract factories owned by Hon Hai Precision Industry Co Ltd.’s Foxconn, Pegatron Corp, Wistron Corp, and others employ hundreds of thousands of workers to assemble Apple devices. Apple’s contract factories inside China have added far more locations than outside, with Foxconn alone expanding from 19 locations in 2015 to 29 in 2019 and Pegatron going from eight to 12, according to Apple’s data. The new locations come as Apple has added watches, smart speakers and wireless headphones to its product line-up. And beyond the contract factories, the rest of Apple’s suppliers – the companies that sell it chips, glass, aluminum casings, cables, circuit boards and much more – became more concentrated in China. Among all supplier locations, 44.9% were in China in 2015, a proportion that rose to 47.6% by 2019, the data showed.