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Apple is looking to expand production outside of China amid Beijing's zero-Covid policies, report says

May 22, 2022, 02:34 IST
Business Insider
Workers in Foxconn's Wuhan factory in central China get tested for Covid-19 on August 5, 2021.Feature China/Future Publishing via Getty Images
  • Apple is looking to expand its production capabilities outside of China, WSJ reported Saturday.
  • The tech giant cited Beijing's strict COVID-19 policies as one influencing factor, sources told the outlet.

Apple is looking to expand its production capabilities outside of China, The Wall Street Journal reported Saturday. The tech giant cited Beijing's zero-Covid policy as one reason behind the reported push, sources close to the matter told the outlet.

Analysts estimate that approximately 90% of Apple products are made by contract manufacturers in China, leaving the tech giant's success vulnerable to the whims of the Chinese Communist Party.

Throughout the COVID-19 pandemic, Apple suppliers such as Foxconn have been forced to shut down due to rising cases. Earlier this month, Quanta Computer — which produces three-quarters of Apple's MacBook products — shut down despite maintaining a "closed-loop" campus designed to prevent the spread of the virus, Reuters reported.

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Now, Apple is telling suppliers that it wants to expand production in India and Southeast Asia, according to the Journal's anonymous sources. Apple did not immediately respond to Insider's request for comment.

On an earnings call in late April, Apple CEO Tim Cook said the company experienced two supply restraints last quarter that impacted Apple's ability to meet consumer demand: pandemic-related disruptions and an industrywide shortage of silicon. Apple CFO Luca Maestri estimated supply chain constraints of between $4 billion and $8 billion for the quarter ending June 30.


"We are excited to be welcoming employees back to the offices in the US and Europe. At the same time, we are monitoring COVID-related disruptions in China," Cook told analysts. "Our thoughts are with all those in the path of the virus, and we remain as committed as ever to doing our part to help protect people and their communities."

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