Apple is looking to boost global production outside of China as the country’s "zero-COVID" strategy cripples production facilities, the Wall Street Journal reported.
The strict lockdown, which has been described by the WHO as "not sustainable," has shut down large cities, including Shanghai, as the highly infectious omicron variant spreads.
Currently, about 90% of Apple products are made in China, with a small number made in India and Vietnam. Apple is looking at factories in India and Vietnam to shore up its supply chain at a time when demand is high.
India is expected to increase its production of iPhones from about 3% last year to between 6% and 7% this year, according to the Wall Street Journal. Low labor costs and a large market make it an attractive destination. Taiwanese companies have already set up facilities in India to make iPhones for the local market, the Journal reported. However, neither India nor Vietnam is expected to radically overtake China as Apple’s main global supplier.
The over-reliance on China has been problematic for Apple in a variety of ways. The company was thrust into a trade war initiated under Donald Trump, then became vulnerable to supply chain shocks during the first wave of the COVID-19 pandemic in early 2020.
The company has also faced intense scrutiny for its human rights record in China, especially on the use of Uyghur labor in its supply chain. Apple was among other leading companies that lobbied Congress against passing the Uyghur Forced Labor Prevention Act.
"They were benefiting from forced labor or sourcing from suppliers that were suspected of using forced labor," Sen. Marco Rubio said at a Senate Foreign Relations Committee hearing last year. "These companies, sadly, were making all of us complicit in these crimes."
A 2020 report found that one of its main suppliers, Lens Technology, had used forced Uyghur labor, a claim Apple denied. Facing renewed criticism, the company announced a new human rights policy aimed at its suppliers.