Apple Looks To Move Beyond China

( According to a recent report in the Wall Street Journal, tech giant Apple has informed some of its contract manufacturers that it wants to increase production outside of China.

The Chinese Communist Party’s onerous “Zero COVID” policy has had a negative impact on production, so Apple is reportedly giving serious consideration to alternative locations, including Vietnam and India.

Currently, more than 90 percent of Apple products like iPhones, MacBooks, and iPads are manufactured by outside contractors in China.

But with potential manufacturing snags caused by China’s draconian Zero-COVID lockdowns taking a bite in sales, Apple is already in talks with some of its outside contractors to find alternative locations for production.

The brutal lockdowns in Shanghai and Kunshan forced Apple to stop production at three suppliers, including Pegatron which manufactures between 20 and 30 percent of all iPhones.

In April, operations at both the Shanghai and Kunshan Pegatron production sites had to be suspended to comply with the government’s COVID lockdowns.

MacBook maker Quanta and iPad assembler Compal also had to shut down production to comply with COVID restrictions.

In Shanghai alone, 31 different companies operate production facilities that supply Apple. The lockdown in Shanghai is taking a chunk out of the tech giant’s revenue for the second quarter, with the company projecting a loss in sales of up to $8 billion.

Apple CEO Tim Cook estimated that Apple’s earnings in the second quarter could be between $4 billion and $8 billion lower than expected. And the primary cause of that is the Shanghai lockdowns.

On top of that, Apple CFO Luca Maestri said consumer demand in China has also been impacted by the disruptions caused by Beijing’s Zero-COVID policy.

Despite the constraints from the lockdowns, Apple’s largest supplier Foxconn has managed to keep production going at its biggest iPhone assembly plant in the Chinese city of Zhengzhou.