The end of Apple’s affair with China(economist.com)
economist.com
The end of Apple’s affair with China
https://www.economist.com/business/2022/10/24/the-end-of-apples-affair-with-china
166 comments
>Chinese companies’ share of iPhone electronics production will rise from 7% this year to 24% by 2025,
I have been repeating this for years [1] [2] but every time gets downvoted into oblivion on HN. Not only that, there are no signs of Apple turning ship either. Those that were forced out by Geopolitics doesn't count.
But yes, doing assembly in India gets their PR win.
At least, judging from the 141 comments so far. There are a few people finally getting it.
Edit: And my quick glance of Economists data suggest they simply classify company by their HQ location. But not by their ownership and shareholding structure. Not that it makes substantial differences, just the numbers are higher than what is shown.
[1] https://news.ycombinator.com/item?id=29489132
[2] Wrote about YMTC on SemiWiki in 2018. And their relationship with Apple.
I have been repeating this for years [1] [2] but every time gets downvoted into oblivion on HN. Not only that, there are no signs of Apple turning ship either. Those that were forced out by Geopolitics doesn't count.
But yes, doing assembly in India gets their PR win.
At least, judging from the 141 comments so far. There are a few people finally getting it.
Edit: And my quick glance of Economists data suggest they simply classify company by their HQ location. But not by their ownership and shareholding structure. Not that it makes substantial differences, just the numbers are higher than what is shown.
[1] https://news.ycombinator.com/item?id=29489132
[2] Wrote about YMTC on SemiWiki in 2018. And their relationship with Apple.
As I understand it, assembly is also the most manual part of the process, so presumably the wage differential between China and India favours the move regardless.
The thing with outsourcing is, the vendor will themselves set up shop wherever the customer wants. In this case all the chinese companies are simply setting up plants in India and Vietnam, so they end up not losing any business in the short term. Same thing happens with software. All of the India consulting firms set up shop all over the world, for example Mexico to provide similar time zones to their US customers yet reduce costs. The customer gets to say we are not relying on country X and the vendor still has that contract.
It makes a difference though. The Indian factories hire all Indian staff and this makes it resilient to any trade war issues that may arise between China and the U.S.
Secondary sanctions may hit the Chinese-owned Indian companies, which could make them no more resilient at all. No? It seems like doesn't matter so much who is employed there as much as who owns them.
I tried looking around to get how much of the iPhones are actually made in India and couldn’t find any clear information.
Apple seems to be relying on Foxconn’s Indian subsidiary, and it is described as an assembly partner, so I’d expect all the parts and chips to be coming from neighboring countries (so mostly China?)
It is still a pretty big deal, but my assumption would be that aside from the trumpeting headlines, Apple and Foxconn are still deeply depending on China at this point and will stay so for many years to come ?
Apple seems to be relying on Foxconn’s Indian subsidiary, and it is described as an assembly partner, so I’d expect all the parts and chips to be coming from neighboring countries (so mostly China?)
It is still a pretty big deal, but my assumption would be that aside from the trumpeting headlines, Apple and Foxconn are still deeply depending on China at this point and will stay so for many years to come ?
You're talking about turning a ship 10000x the size of the Titanic.
A company like Apple with a CEO that built his career on logistics and production? You can be sure there's a plan. You just aren't allowed to see it.
A company like Apple with a CEO that built his career on logistics and production? You can be sure there's a plan. You just aren't allowed to see it.
> A company like Apple with a CEO that built his career on logistics and production? You can be sure there's a plan. You just aren't allowed to see it.
This, this and THIS !
Do not underestimate Apple when it comes to supply chain management, they are the kings.
Don't believe me ?
Look at the COVID-induced semi-conductor shortage.
Every other manufacturer out there that relies on a very strict definition of Just-In-Time supply chain has had issues with stupid-long lead times.
Meanwhile Apple ? Most of their product range has remained on next-day delivery throughout, and custom-build stuff has only been delayed by a few weeks rather than the months and years seen at other manufacturers.
Apple work much much closer with their supply chain than the majority of other manufacturers out there.
This, this and THIS !
Do not underestimate Apple when it comes to supply chain management, they are the kings.
Don't believe me ?
Look at the COVID-induced semi-conductor shortage.
Every other manufacturer out there that relies on a very strict definition of Just-In-Time supply chain has had issues with stupid-long lead times.
Meanwhile Apple ? Most of their product range has remained on next-day delivery throughout, and custom-build stuff has only been delayed by a few weeks rather than the months and years seen at other manufacturers.
Apple work much much closer with their supply chain than the majority of other manufacturers out there.
Is there any data for this? TBH, It doesn't pass the smell-test for me. Apple has a tiny product range, meanwhile companies like Samsung sell everything from chips, screens, and other components, to phones, laptops, tvs, etc, etc. Or even Dell, which has a massive product range; Our company purchased a ton of hardware from them during covid with no lead time issues - at-least on the things we wanted.
FWIW we had some pretty weird lead times with Dell during the worst of COVID.
They did re-engineer some products to deal with chip shortages e.g. the D6000 docking stations were replaced with D6000S models that had no 3.5mm headphone jack (presmuably due to a scarcity of DAC chips).
Network switch hardware still has some brutal delays at the moment, have been advised of 250+ day lead times for switches (across different models and manufacturers).
They did re-engineer some products to deal with chip shortages e.g. the D6000 docking stations were replaced with D6000S models that had no 3.5mm headphone jack (presmuably due to a scarcity of DAC chips).
Network switch hardware still has some brutal delays at the moment, have been advised of 250+ day lead times for switches (across different models and manufacturers).
Specifically for DAC, it's maybe due to the AKM factory fire
> Apple has a tiny product range
This is how apple manages supply chain issues.. By having a few products it is much easier to manage.
More so when many of your products dont change much year-to-year. How long has the ipad frame been the exact same size?
This is how apple manages supply chain issues.. By having a few products it is much easier to manage.
More so when many of your products dont change much year-to-year. How long has the ipad frame been the exact same size?
[deleted]
Can you recommend any sources to learn more about this?
I've had MBPs on 5 week+ delivery schedules.
It took almost 3 months for me to get my MBP this year. Ordered in mid-March, wasn't delivered until early June.
This really reads like your typical apple propaganda by non-paid apple employees which is really weird.
I got an Apple Ipad last year directly from apple.com, it took MONTHS to get it.
Apple's own site told me this, once i placed my order:
Shipment 1 Ships: 7-9 weeks
There are numerous stories about how it is faster to get a referb studio vs a new one?
> Apple work much much closer with their supply chain than the majority of other manufacturers out there.
Foxconn and such dont just supply Apple. It is odd to believe that apple is the only one working with them to get their stuff. What do the others do, sit around and wait? Not talk to foxconn at all?
I got an Apple Ipad last year directly from apple.com, it took MONTHS to get it.
Apple's own site told me this, once i placed my order:
Shipment 1 Ships: 7-9 weeks
There are numerous stories about how it is faster to get a referb studio vs a new one?
> Apple work much much closer with their supply chain than the majority of other manufacturers out there.
Foxconn and such dont just supply Apple. It is odd to believe that apple is the only one working with them to get their stuff. What do the others do, sit around and wait? Not talk to foxconn at all?
That's very generous to Apple. They have a history of success, but for better or worse we're in uncharted territory. I mean, if the transition takes 10+ years, wil Tim Cook even be at the helm as it happens ?
BTW I didn't mean my comment as a critique of Apple, I think they did get everything right on the logistics side given what has been hapenning for the last decade (they weren't immune, but they clearly navigated it extremely well). But I would be warry of being too optimistic on their diversification efforts or looking at it as a done deal.
Kinda reminds me of the effort to have the Mac Pro assembled in the US. A lot of people were looking at it im very simple terms, when it's a really difficult thing to do in any viable economical fashion.
BTW I didn't mean my comment as a critique of Apple, I think they did get everything right on the logistics side given what has been hapenning for the last decade (they weren't immune, but they clearly navigated it extremely well). But I would be warry of being too optimistic on their diversification efforts or looking at it as a done deal.
Kinda reminds me of the effort to have the Mac Pro assembled in the US. A lot of people were looking at it im very simple terms, when it's a really difficult thing to do in any viable economical fashion.
It is worth noting that a lot of components of the iPhone are not sourced from within China. China is where it is assembled, but the screens, RAM, CPU, and storage are produced in other countries. Of the remaining parts I think batteries and radios are the ones that will probably retain production in China the longest.
Apple has ~150 suppliers in PRC, other countries barely break 30. They have some of the higher value components, but PRC pockets ~25% of BOM since iPhoneX, so likely higher now with BOE, YMTC (if it survies), Winstron and Luxshare, as as far as I know, a lot of the hardware design shifted to SZ during covid.
Reality is apart from shifting final assembly to other countries (insert 8$ per phone meme), PRC is moving up value chain in Apple. And if Apple wants to keep PRC market access, they'll keep the affair happening. Hence US gov had to drop the boot with YMTC.
Reality is apart from shifting final assembly to other countries (insert 8$ per phone meme), PRC is moving up value chain in Apple. And if Apple wants to keep PRC market access, they'll keep the affair happening. Hence US gov had to drop the boot with YMTC.
My M1 Mac mini from 2020 says "Made in Malaysia" on it.
The diversification has been happening longer than many people believe.
The diversification has been happening longer than many people believe.
To note, the "made in xxxx" denomination can be pretty fuzzy. You can source pre-assembled/fully functional blocks from anywhere, put it in the final enclosing at the last destination, and stamp it as made there.
Countries can be more or less strict about what threshold needs to be passed to be accepted as made locally, but I'd expect Malaysia to not be against computers production getting attributed to them.
Countries can be more or less strict about what threshold needs to be passed to be accepted as made locally, but I'd expect Malaysia to not be against computers production getting attributed to them.
Very insightful. It corrected a lot of incorrect information I had on this issues.
1. Labor cost is an issue but at 530 per month as of 2020 Chinese mfr labor is still relatively cheap and only twice as expensive as India.
2. Sales in China peaked in 2015-6 in terms of percentage of revenue for Apple
3. Despite the move, analysts predict 80% of Apple products will still be made in China by 2025.
1. Labor cost is an issue but at 530 per month as of 2020 Chinese mfr labor is still relatively cheap and only twice as expensive as India.
2. Sales in China peaked in 2015-6 in terms of percentage of revenue for Apple
3. Despite the move, analysts predict 80% of Apple products will still be made in China by 2025.
> 1. Labor cost is an issue but at 530 per month as of 2020 Chinese mfr labor is still relatively cheap and only twice as expensive as India.
Only by US standards. You can pay that much for a factory worker in eastern/south Europe. The US is a huge outlier regarding salaries compared to practically anywhere else.
Only by US standards. You can pay that much for a factory worker in eastern/south Europe. The US is a huge outlier regarding salaries compared to practically anywhere else.
> You can pay that much for a factory worker in eastern/south Europe
You'd be well bellow the gross average everywhere in the EU, even the poorest countries. Outside of the EU you might have a shot in Albania or Moldova, but you'd lack all the infrastructure and stability you'd need for large scale manufacturing.
You'd be well bellow the gross average everywhere in the EU, even the poorest countries. Outside of the EU you might have a shot in Albania or Moldova, but you'd lack all the infrastructure and stability you'd need for large scale manufacturing.
A factory worker is living on minimum wage. Nowhere near average.
They don't seem to be minimum wage workers in China[1] and India[2]. And are in fact much closer to median than minimum.
Europe's minimum wages are much higher in comparison[3].
[1]https://en.wikipedia.org/wiki/Minimum_wage_in_China
[2]https://www.india-briefing.com/news/guide-minimum-wage-india...
[3]https://en.wikipedia.org/wiki/List_of_European_countries_by_...
Europe's minimum wages are much higher in comparison[3].
[1]https://en.wikipedia.org/wiki/Minimum_wage_in_China
[2]https://www.india-briefing.com/news/guide-minimum-wage-india...
[3]https://en.wikipedia.org/wiki/List_of_European_countries_by_...
I don't understand your point. Google says Chinese manufacturing jobs pay $11k per year in 2020. This is a salary level of a south/east European factory worker.
My point is that in general manufacturing jobs aren't minimum wage. And those levels are below minimum wage in most European countries.
I just checked job postings in Bulgaria(the poorest EU country) and $11k is just a bit above entry level salary for unskilled uneducated manufacturing workers. It's higher with taxes, experience, etc. and there's a lot of better options at that level.
And the truth is even if you can find cheap employees in Albania, Bulgaria, Belarus, Macedonia, infrastructure is not there and investment wouldn't make much sense because there's not a lot of people here that are okay with such low wages.
I just checked job postings in Bulgaria(the poorest EU country) and $11k is just a bit above entry level salary for unskilled uneducated manufacturing workers. It's higher with taxes, experience, etc. and there's a lot of better options at that level.
And the truth is even if you can find cheap employees in Albania, Bulgaria, Belarus, Macedonia, infrastructure is not there and investment wouldn't make much sense because there's not a lot of people here that are okay with such low wages.
That's the salary. Now, you have employers costs, which will be much higher in socialistic countries in EU.
not so much - US employees need very expensive employer-provided health insurance. In the EU that's covered by taxes instead. I couldn't find a direct comparison (hard because it varies by state & country), but it seems to be a wash:
https://topsourceworldwide.com/international-salaries/
note that China is 40% of salary as a payroll tax, which tops the list.
https://topsourceworldwide.com/international-salaries/
note that China is 40% of salary as a payroll tax, which tops the list.
Quite the (wrong) assumptions, in service to a preconceived narrative.
What you term "socialistic" countries handle government services via taxes more than levies on employers.
It looks like the employer cost in China is 40.92%[0], while the highest percentage in Europe is 32.4% in Italy, and Switzerland imposes only 9.5%.
0. https://topsourceworldwide.com/international-salaries/
What you term "socialistic" countries handle government services via taxes more than levies on employers.
It looks like the employer cost in China is 40.92%[0], while the highest percentage in Europe is 32.4% in Italy, and Switzerland imposes only 9.5%.
0. https://topsourceworldwide.com/international-salaries/
Average is a really bad way of measuring what people get paid though. The average pay in Poland is currently 6700PLN/month , and that's a crazy amount of money for that country. Like, teachers are paid 2000-3000PLN, just to show you the disparity between the average and "real" pay of real people. A factory worker will make much closer to 2000PLN a month than 6700PLN.
Your data is a bit dated - the minimum wage in Poland is 3010 PLN and it'll be 3490 PLN starting 1st Jan 2023.
The unemployment rate is very low, so to be able to hire factory employees you'd realistically need to offer at least 5000 PLN (~1000 USD) in gross salary.
You'd have a much better chance to open such factory in Spain or Portugal, the salaries are similar, but you'll have an easier time hiring + green energy from sun.
The unemployment rate is very low, so to be able to hire factory employees you'd realistically need to offer at least 5000 PLN (~1000 USD) in gross salary.
You'd have a much better chance to open such factory in Spain or Portugal, the salaries are similar, but you'll have an easier time hiring + green energy from sun.
Minimum wage in 2022 is 3010PLN, so they can't make 2k unless you're talking about pay after taxes, but that 6.7k figure is before taxes, so it's not an apples to apples comparison.
> Like, teachers are paid 2000-3000PLN
Can you please provide some sources for that claim?
For example [1] says that the lowest, starting salary is already over 3000. And the salaries for teachers grow with work experience.
[1] https://notesfrompoland.com/2022/10/12/polish-teachers-among...
Can you please provide some sources for that claim?
For example [1] says that the lowest, starting salary is already over 3000. And the salaries for teachers grow with work experience.
[1] https://notesfrompoland.com/2022/10/12/polish-teachers-among...
>>Can you please provide some sources for that claim?
Family who are teachers - but I guess the bottom of the scale has increased now, that's my mistake.
Also observe how the top of the scale is 64578PLN/year, and according to the article, teachers reach that level in about 20 years on average. So even after working in the profession for 20 years, you don't reach the average wage for your country when working as a teacher.
Family who are teachers - but I guess the bottom of the scale has increased now, that's my mistake.
Also observe how the top of the scale is 64578PLN/year, and according to the article, teachers reach that level in about 20 years on average. So even after working in the profession for 20 years, you don't reach the average wage for your country when working as a teacher.
The "average salary in Poland" you are mentioning is a very specific measurement based on companies that have 10 or more employees. This measures only a subset of workers: in particular, it does not measure the salaries of school teachers.
The true average salary in Poland is lower than that.
I suspect that you do reach the average salary as an experienced teacher.
I suspect that you do reach the average salary as an experienced teacher.
You can pay that much for a factory worker in eastern/south Europe.
I don't know about eastern Europe. In Spain, we are in the south, you can't pay 530 per month. Legal minimum salary is around double that number, then you need to add SS (30 to 40% of that) and just FYI, there's no way people will work in a factory for minimum wage anyway, so think of 2k for entry positions.
I don't know about eastern Europe. In Spain, we are in the south, you can't pay 530 per month. Legal minimum salary is around double that number, then you need to add SS (30 to 40% of that) and just FYI, there's no way people will work in a factory for minimum wage anyway, so think of 2k for entry positions.
> The US is a huge outlier regarding salaries compared to practically anywhere else.
That is obviously not true, unless you exclude a lot of countries from "anywhere else".
That is obviously not true, unless you exclude a lot of countries from "anywhere else".
Ok name the countries.
It might be an exaggeration to say that the U.S. is a huge outlier. I suppose that's subjective. But it certainly looks like an outlier in this summary of average wages of OECD countries: https://data.oecd.org/earnwage/average-wages.htm Average wages in the U.S. are, in fact, the highest among all OECD countries--and much higher than all but a few very small countries (Luxembourg, Switzerland, and Iceland).
I wonder, though, how well this holds up if you look at the lower quintiles of the income distribution in each country--i.e., if you compare poorer workers instead of average workers. I would not be surprised if the bottom quintile earners in the U.S. make less than their counterparts in the EU, and perhaps elsewhere.
Edit: OECD also provides average earnings by activity and if you look at average earnings in "industry," the U.S. is, indeed, far from the top, with many countries in Eastern Europe ranking quite highly. Of course, that could just as easily be an effect of the types of industry located in each country, more than anything. You may still need to pay an American far more to build an iPhone than a Slovenian, which is a question I don't think this data meaningfully addresses.
https://data.oecd.org/earnwage/employee-compensation-by-acti...
I wonder, though, how well this holds up if you look at the lower quintiles of the income distribution in each country--i.e., if you compare poorer workers instead of average workers. I would not be surprised if the bottom quintile earners in the U.S. make less than their counterparts in the EU, and perhaps elsewhere.
Edit: OECD also provides average earnings by activity and if you look at average earnings in "industry," the U.S. is, indeed, far from the top, with many countries in Eastern Europe ranking quite highly. Of course, that could just as easily be an effect of the types of industry located in each country, more than anything. You may still need to pay an American far more to build an iPhone than a Slovenian, which is a question I don't think this data meaningfully addresses.
https://data.oecd.org/earnwage/employee-compensation-by-acti...
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There are too many to name, it's basically the entire developed world, which is basically NA, Western Europe, Australia, Japan, South Korea.
Not saying the US is not more expensive, but it's not a "huge outlier" by any means.
Not saying the US is not more expensive, but it's not a "huge outlier" by any means.
Belgium. Denmark. Sweden. Germany. All relatively competitive with US on an hourly basis.
Local grocery in Seattle is hiring, $26/hour. From what I read on hackernews is like entry software engineer job in Sweden.
Cost of living between Seattle and Stockholm is also probably comparable…
But to be fair, US software engineer salaries are super high compared to everywhere except Switzerland.
However there’s still no way in hell a grocery store anywhere in Europe is going to pay someone $26/h.
But to be fair, US software engineer salaries are super high compared to everywhere except Switzerland.
However there’s still no way in hell a grocery store anywhere in Europe is going to pay someone $26/h.
€32.8* > $27.77
:shrug:
* Euro zone, EU is less
https://ec.europa.eu/eurostat/web/products-eurostat-news/-/d... https://tradingeconomics.com/united-states/wages
:shrug:
* Euro zone, EU is less
https://ec.europa.eu/eurostat/web/products-eurostat-news/-/d... https://tradingeconomics.com/united-states/wages
One is labor cost the other is wage. Two different although related metrics.
[deleted]
All the countries in the EU:
https://en.wikipedia.org/wiki/List_of_European_Union_member_...
The issue isn't entirely "how much you pay someone" but also a significant bit of "the supply chain for all of the parts are entirely within the city."
That supply chain part was traditionally a strong draw for electronics manufacturing to be done in China as you can get parts from down the street rather than the next city or state or country over.
That supply chain part was traditionally a strong draw for electronics manufacturing to be done in China as you can get parts from down the street rather than the next city or state or country over.
From an European perspective labour in the US is cheaper
I think at one point Steve Jobs had responded to a question on the topic of manufacturing location that the issue with moving manufacturing out of China, and specifically bringing more manufacturing back to the United States, had little to do with the cost of labor and more to do with the logistics networks. Building something as complex as an iPhone at scale and cost is basically impossible to do in the United States or really anywhere else right now.
The kicker is that Apple has made itself too dependent on Chinese suppliers. It has outsourced much of the development of components and has lost in-house know-how on how to recreate those parts if a fall-out were to occur.
This is all according to Apple's "Don't leave money on the table" mantra where they want increasing profits year after year. In the end, it'll hurt them...bad.
This is all according to Apple's "Don't leave money on the table" mantra where they want increasing profits year after year. In the end, it'll hurt them...bad.
> Labor cost is an issue but at 530 per month as of 2020 Chinese mfr labor is still relatively cheap and only twice as expensive as India.
The interesting question the article didn't answer is "how much labor goes into making an iphone?" The economics are very different if labor is 10% of the cost vs 70% of the cost.
The interesting question the article didn't answer is "how much labor goes into making an iphone?" The economics are very different if labor is 10% of the cost vs 70% of the cost.
To me, I think that Apple's reliance on China, and Taiwan, was and is an extremely risky and misguided decision. Imagine if Apple had developed a total reliance on chip factories built in, say, Ukraine, back in 2018. That's about where we are now with Taiwan and China, I believe.
It's sure been profitable - but at, I would argue, obscene risk. A few years of TSMC being unavailable would have Apple on life support. Apple would actually be worse off than many companies and the ditching Intel decision would do a total 180 into a massive mistake. Nobody cares if you have higher-performance products if you can't make them.
Edit: For those saying that can't happen, think Ukraine in 2012 or 2018. Russia? Invading? Can't happen. For Taiwan, China, invading? Can't happen.
It's sure been profitable - but at, I would argue, obscene risk. A few years of TSMC being unavailable would have Apple on life support. Apple would actually be worse off than many companies and the ditching Intel decision would do a total 180 into a massive mistake. Nobody cares if you have higher-performance products if you can't make them.
Edit: For those saying that can't happen, think Ukraine in 2012 or 2018. Russia? Invading? Can't happen. For Taiwan, China, invading? Can't happen.
> For those saying that can't happen, think Ukraine in 2012 or 2018. Russia? Invading? Can't happen?
No one paying even a little bit of attention thought “can’t” since the invasion of Georgia in 2008. In 2012 they would have thought “has no reason to at the moment”, much as they would about Belarus today; what was unexpected in 2014 was the Maidan Revolution tossing out the Russia-aligned government, to which the invasion was an immediate response.
And in 2018 the likelihood of further invasion was widely discussed, while the scale and precise timing may have been unpredictable in 2018, that further invasion was likely, especially an attempt to seize the Donbas, where Russia has been supporting proxy forces since the 2014 invasion, was not.
> For Taiwan, China, invading? Can't happen.
That’s... Not at all the general thought.
No one paying even a little bit of attention thought “can’t” since the invasion of Georgia in 2008. In 2012 they would have thought “has no reason to at the moment”, much as they would about Belarus today; what was unexpected in 2014 was the Maidan Revolution tossing out the Russia-aligned government, to which the invasion was an immediate response.
And in 2018 the likelihood of further invasion was widely discussed, while the scale and precise timing may have been unpredictable in 2018, that further invasion was likely, especially an attempt to seize the Donbas, where Russia has been supporting proxy forces since the 2014 invasion, was not.
> For Taiwan, China, invading? Can't happen.
That’s... Not at all the general thought.
> No one paying even a little bit of attention thought “can’t”
Maybe that's true in the abstract, but how did those in power act based on this obvious threat?
Europe completely refused to even begin to diversify its natural gas sources until this year, even though that obviously should have happened after the annexation of Crimea at the very latest. They invited catastrophe by relying on Russian energy.
In practice, they didn't take the threat seriously. They thought it wouldn't happen, they gambled quite a lot on that outcome.
Maybe that's true in the abstract, but how did those in power act based on this obvious threat?
Europe completely refused to even begin to diversify its natural gas sources until this year, even though that obviously should have happened after the annexation of Crimea at the very latest. They invited catastrophe by relying on Russian energy.
In practice, they didn't take the threat seriously. They thought it wouldn't happen, they gambled quite a lot on that outcome.
> Maybe that's true in the abstract, but how did those in power act based on this obvious threat?
Again, it wasn’t an obvious threat, not because Russia lacked capacity or will but because it already controlled Ukraine via a puppet government. That changing, and very quickly from the emergence of a significant protest movement, was the unpredicted wildcard.
> Europe completely refused to even begin to diversify its natural gas sources until this year,
Baltic Pipe, a major component of the diversification effort, was identified as an EC interest in 2013, completed a feasibility study in 2016, had capacity agreements in place in 2018, and went online this September.
Infrastructure isn’t something that pops into place when you snap your fingers.
Again, it wasn’t an obvious threat, not because Russia lacked capacity or will but because it already controlled Ukraine via a puppet government. That changing, and very quickly from the emergence of a significant protest movement, was the unpredicted wildcard.
> Europe completely refused to even begin to diversify its natural gas sources until this year,
Baltic Pipe, a major component of the diversification effort, was identified as an EC interest in 2013, completed a feasibility study in 2016, had capacity agreements in place in 2018, and went online this September.
Infrastructure isn’t something that pops into place when you snap your fingers.
All of that being said, I wrongly predicted that Russia wouldn't invade, because I rightly predicted the invasion would be a disaster for Russia.
A CCP invasion of Taiwan would be even more disastrous for the PRC. They would need to conduct an amphibious assault, gain air superiority against "the quad" (no easy task), and would be unlikely to gain control of TSMC.[0]
I think my reason for miscalculating the Russian invasion had to do with reasons unrelated to the actual military campaign: Putin felt that Russia's culture was existentially threatened by the West, its ability to invade was monotonically decreasing, and believed that a largely ineffectual, predictable US administration that appears to follow the mantra "speak loudly and carry a paper straw" wouldn't resort to extreme measures to stop Russia. In other words, invasion made total sense from a certain political-cultural calculus.
I'm much more worried about the CCP, who have become increasingly ultra-nationalist, including concentration camps and racial-superiority indoctrination in schools (including something like a "stabbed in the back" narrative). The political crackdowns have become quite severe, and the Chinese financial is in bad shape, so an attempted invasion of Taiwan may increasingly be the thing the Party sees as bolstering their position domestically.
The invasion would still be a disaster, and I have a feeling that the US & Taiwan already have plans to relocate the personnel from Taiwan's TSMC facilities to the US in order to use their specialized knowledge in order to keep producing superior chips.
[0] https://www.jonstokes.com/p/why-a-chinese-invasion-of-taiwan
A CCP invasion of Taiwan would be even more disastrous for the PRC. They would need to conduct an amphibious assault, gain air superiority against "the quad" (no easy task), and would be unlikely to gain control of TSMC.[0]
I think my reason for miscalculating the Russian invasion had to do with reasons unrelated to the actual military campaign: Putin felt that Russia's culture was existentially threatened by the West, its ability to invade was monotonically decreasing, and believed that a largely ineffectual, predictable US administration that appears to follow the mantra "speak loudly and carry a paper straw" wouldn't resort to extreme measures to stop Russia. In other words, invasion made total sense from a certain political-cultural calculus.
I'm much more worried about the CCP, who have become increasingly ultra-nationalist, including concentration camps and racial-superiority indoctrination in schools (including something like a "stabbed in the back" narrative). The political crackdowns have become quite severe, and the Chinese financial is in bad shape, so an attempted invasion of Taiwan may increasingly be the thing the Party sees as bolstering their position domestically.
The invasion would still be a disaster, and I have a feeling that the US & Taiwan already have plans to relocate the personnel from Taiwan's TSMC facilities to the US in order to use their specialized knowledge in order to keep producing superior chips.
[0] https://www.jonstokes.com/p/why-a-chinese-invasion-of-taiwan
> > For Taiwan, China, invading? Can't happen.
> That’s... Not at all the general thought.
Indeed. AFAIK the general sentiment is that the only way they don't invade some time this century is if they manage to Hong Kongize them to transition them toward full annexation, through soft power.
> That’s... Not at all the general thought.
Indeed. AFAIK the general sentiment is that the only way they don't invade some time this century is if they manage to Hong Kongize them to transition them toward full annexation, through soft power.
That's a nice idea in theory. As much as I'm harsh on Apple for their decisions elsewhere, TSMC is the right choice, right now. Two things that are hard to ignore:
1. Apple held moving the Mac line on Intel for years despite clear indications that it was hurting them.
2. Intel has begun moving to TSMC to fab chips in order to be competitive with AMD who already moved.
What alternative move should Apple make? Move to Samsung, where a more expansionist China is still a problem? Start doing their own fabrication in the western hemisphere, a process that could take decades to complete.
It is likely that Apple wants to use proposed TSMC or Intel fabs in Arizona, but cannot today.
1. Apple held moving the Mac line on Intel for years despite clear indications that it was hurting them.
2. Intel has begun moving to TSMC to fab chips in order to be competitive with AMD who already moved.
What alternative move should Apple make? Move to Samsung, where a more expansionist China is still a problem? Start doing their own fabrication in the western hemisphere, a process that could take decades to complete.
It is likely that Apple wants to use proposed TSMC or Intel fabs in Arizona, but cannot today.
That's like super naive.
First, you mentioned it. "It has sure been profitable". That's kinda the whole point. You get more profits, you use those profits for R&D to further distance yourself from the competition.
If there is any way to reduce your risk it is building a technological edge over competition and sizeable cash reserves.
Second, even if Apple faced complete stoppage in production, its situation is different from other companies. It not only can do things that other companies can't (like pull cash to build entire supply chain in some other place), it also has devout user base that will mostly just wait for Apple to come back. People who buy say Samsung laptops and phones will switch to another brand with no second thought if they can't buy Samsung, while people who buy Apple will try as much to wait and will not switch easily.
Third, the US is currently the guarantor of Taiwan's safety so maybe the risk isn't as big as you think.
Fourth, if TSMC is unavailable they will spin the production somewhere else. And who do you think will get the first chips out of it -- the companies that are the most ready (Apple, they already have all the know how and designs), the companies that are ready to pay the most for the privilege (Apple, because of their cushy margins) and the companies that have the most weight behind them (again Apple).
So no, I think that saying Apple's risk is obscene is just naive. Apple has positioned itself to be best at weathering any storm that might happen, it knows the competition will be hit even more and is using this to reap as much benefits as it can while the party lasts.
First, you mentioned it. "It has sure been profitable". That's kinda the whole point. You get more profits, you use those profits for R&D to further distance yourself from the competition.
If there is any way to reduce your risk it is building a technological edge over competition and sizeable cash reserves.
Second, even if Apple faced complete stoppage in production, its situation is different from other companies. It not only can do things that other companies can't (like pull cash to build entire supply chain in some other place), it also has devout user base that will mostly just wait for Apple to come back. People who buy say Samsung laptops and phones will switch to another brand with no second thought if they can't buy Samsung, while people who buy Apple will try as much to wait and will not switch easily.
Third, the US is currently the guarantor of Taiwan's safety so maybe the risk isn't as big as you think.
Fourth, if TSMC is unavailable they will spin the production somewhere else. And who do you think will get the first chips out of it -- the companies that are the most ready (Apple, they already have all the know how and designs), the companies that are ready to pay the most for the privilege (Apple, because of their cushy margins) and the companies that have the most weight behind them (again Apple).
So no, I think that saying Apple's risk is obscene is just naive. Apple has positioned itself to be best at weathering any storm that might happen, it knows the competition will be hit even more and is using this to reap as much benefits as it can while the party lasts.
If China invades Taiwan, it will not be possible to do business with China or Taiwan and every company with substantial exposure to this risk should be preparing for the possibility that all resources in China are instantly "lost" or unavailable for many years.
Apple's production capacity has taken decades to build and will take years at minimum to restore. Their exposure is so immense that it would make sense for them to spend a percentage of their cash position just on lobbying to try and prevent the outbreak of war.
Their risk is obscene. They're poorly positioned because their manufacturing base is undiversified and in the case of "complete shutoff of goods from China" it will be years before they're back at capacity.
Apple's production capacity has taken decades to build and will take years at minimum to restore. Their exposure is so immense that it would make sense for them to spend a percentage of their cash position just on lobbying to try and prevent the outbreak of war.
Their risk is obscene. They're poorly positioned because their manufacturing base is undiversified and in the case of "complete shutoff of goods from China" it will be years before they're back at capacity.
> Fourth, if TSMC is unavailable they will spin the production somewhere else.
Where?
Intel would sell them their fabs, but they don't have a process as advanced as TSMC 5nm. Samsung might be able to compete, but their yields are wickedly low and still slightly behind TSMC. GlobalFoundries might accept Apple as a customer, but then we'd basically have two Qualcomms.
What is Apple's plan-b for Taiwan?
Where?
Intel would sell them their fabs, but they don't have a process as advanced as TSMC 5nm. Samsung might be able to compete, but their yields are wickedly low and still slightly behind TSMC. GlobalFoundries might accept Apple as a customer, but then we'd basically have two Qualcomms.
What is Apple's plan-b for Taiwan?
Isn't TSMC building outside Taiwan, to your point?
https://www.tomshardware.com/news/tsmc-fab-21-arizona
https://www.tomshardware.com/news/tsmc-fab-21-arizona
It is only 20000 wafers per month on 5nm. Only 5nm factories in Taiwan make 150000 wafers per month.
https://wccftech.com/tsmc-boosts-5nm-production-to-150000-wa...
https://wccftech.com/tsmc-boosts-5nm-production-to-150000-wa...
A few years of TSMC being unavailable would cripple consumer electronics in general. Lots of chip vendors all buy their dies from TSMC. It's not just Apple by a long shot.
This is a known problem, potentially one even at the scale of being a national security issue. It's a big part of why there are all these new federal subsidies to try and bring advanced chip-fab back to the US.
This is a known problem, potentially one even at the scale of being a national security issue. It's a big part of why there are all these new federal subsidies to try and bring advanced chip-fab back to the US.
There was no alternative at the time regarding overall production. China gave them the option to be extremely flexible and efficient. Other countries like India/Vietnam is copying the Chinese cookbook.
Ony TSMC is capable of producing the most performant chips.
Ony TSMC is capable of producing the most performant chips.
> There was no alternative at the time regarding overall production. China gave them the option to be extremely flexible and efficient. Other countries like India/Vietnam is copying the Chinese cookbook.
Yes, and no. Apple has done manufacturing in America before, a long time ago (remember the Apple II?). Also with the $200B in cash they had, they could probably build every factory down to the screw factory they needed. Also worth remembering is that iPhone bodies don't change very much (iPhone SE is like, a decade of a design and still going). $200B would buy at least 5 or more latest-gen chip plants, easily, or at least give TSMC all the capital they needed.
If I was Tim Cook, I would have absolutely looked into segmentation. American manufacturing for American customers, Chinese manufacturing for European/Asian customers, Indian manufacturing for Indian customers.
Yes, and no. Apple has done manufacturing in America before, a long time ago (remember the Apple II?). Also with the $200B in cash they had, they could probably build every factory down to the screw factory they needed. Also worth remembering is that iPhone bodies don't change very much (iPhone SE is like, a decade of a design and still going). $200B would buy at least 5 or more latest-gen chip plants, easily, or at least give TSMC all the capital they needed.
If I was Tim Cook, I would have absolutely looked into segmentation. American manufacturing for American customers, Chinese manufacturing for European/Asian customers, Indian manufacturing for Indian customers.
> Also with the $200B in cash they had
When exactly are you talking about?
> $200B would buy at least 5 or more latest-gen chip plants, easily, or at least give TSMC all the capital they needed.
$200B and a decade. Also do you think Taiwan is just going to let go of their biggest bargaining chip for a measly $200B?
> If I was Tim Cook, I would have absolutely looked into segmentation. American manufacturing for American customers, Chinese manufacturing for European/Asian customers, Indian manufacturing for Indian customers.
I mean they are doing this as per the article.
When exactly are you talking about?
> $200B would buy at least 5 or more latest-gen chip plants, easily, or at least give TSMC all the capital they needed.
$200B and a decade. Also do you think Taiwan is just going to let go of their biggest bargaining chip for a measly $200B?
> If I was Tim Cook, I would have absolutely looked into segmentation. American manufacturing for American customers, Chinese manufacturing for European/Asian customers, Indian manufacturing for Indian customers.
I mean they are doing this as per the article.
> $200B and a decade. Also do you think Taiwan is just going to let go of their biggest bargaining chip for a measly $200B?
Not necessarily a decade. Intel is promising ~4 years for their fabs, and hoping to be online by 2025-ish if I recall correctly. Fab production is also, it seems, going quicker than expected.
> When exactly are you talking about?
In 2018, Apple's cash pile hit $285 Billion. I was underestimating it. Imagine if they had started building fabs back in 2018 or earlier - they would be coming online, potentially, right now. Which would have been great.
> I mean they are doing this as per the article.
I'm looking at geopolitics and thinking this could end up being too little too late.
https://www.cnbc.com/2018/02/01/apple-earnings-q1-2018-how-m...
Not necessarily a decade. Intel is promising ~4 years for their fabs, and hoping to be online by 2025-ish if I recall correctly. Fab production is also, it seems, going quicker than expected.
> When exactly are you talking about?
In 2018, Apple's cash pile hit $285 Billion. I was underestimating it. Imagine if they had started building fabs back in 2018 or earlier - they would be coming online, potentially, right now. Which would have been great.
> I mean they are doing this as per the article.
I'm looking at geopolitics and thinking this could end up being too little too late.
https://www.cnbc.com/2018/02/01/apple-earnings-q1-2018-how-m...
Your point is very strange. Apple did not just suddenly decide in 2018 to manufacture in China. It is what they have been doing for like 10-15 years before that. If you count from iPod on. In mid 2000s it certainly was not an option to manufacture just anywhere and certainly not by them.
> Not necessarily a decade. Intel is promising ~4 years for their fabs, and hoping to be online by 2025-ish if I recall correctly. Fab production is also, it seems, going quicker than expected.
Ok and how many generations is Intel behind TSMC now and how many will they be in 4 years?
You think Apple investors and customers are suddenly going to be OK with a new version of the iphone being worse than its predecessor? To be feasible they can't just catch up, they have to surpass.
> Not necessarily a decade. Intel is promising ~4 years for their fabs, and hoping to be online by 2025-ish if I recall correctly. Fab production is also, it seems, going quicker than expected.
Ok and how many generations is Intel behind TSMC now and how many will they be in 4 years?
You think Apple investors and customers are suddenly going to be OK with a new version of the iphone being worse than its predecessor? To be feasible they can't just catch up, they have to surpass.
> In 2018, Apple's cash pile hit $285 Billion. I was underestimating it.
Much has changed since 2018.
Apple cash on hand for the quarter ending June 30, 2022 was $48.231B, a 21.82% decline year-over-year.
Apple cash on hand for 2021 was $62.639B, a 31.12% decline from 2020.
Apple cash on hand for 2020 was $90.943B, a 9.56% decline from 2019
Apple cash on hand for 2019 was $100.557B, a 51.67% increase from 2018.[1]
[1] https://www.macrotrends.net/stocks/charts/AAPL/apple/cash-on...
Much has changed since 2018.
Apple cash on hand for the quarter ending June 30, 2022 was $48.231B, a 21.82% decline year-over-year.
Apple cash on hand for 2021 was $62.639B, a 31.12% decline from 2020.
Apple cash on hand for 2020 was $90.943B, a 9.56% decline from 2019
Apple cash on hand for 2019 was $100.557B, a 51.67% increase from 2018.[1]
[1] https://www.macrotrends.net/stocks/charts/AAPL/apple/cash-on...
Intel already has plenty of fabs in the US. There are also a number of semiconductor companies with fabs in the US. They might not be as advanced as TSMC, but the infrastructure and workforce is already in place. What is lacking is a desire to dump a bunch of capital into fabs in an industry that has a history of severe boom/bust cycles.
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Apple went from the brink of bankruptcy to a $3T market cap, all on the back of Chinese/Taiwanese manufacturing. It's pretty safe to say that the move wasn't "misguided".
There are a lot of companies dependent on TSMC, not just Apple.
I don't dispute that - but Apple is still on the line the most of any company if TSMC were to become unavailable (in sales, in products requiring TSMC chips, lost sales, Apple Silicon on all of their devices, so forth). Also Apple had the most capital of any company and thus the least excuse for such dependency. 4 years ago, according to CNBC, they had $285 billion in cash reserves. That could've definitely bought some fabs in America that would be coming online right now.
NVIDIA still can make parts in Korea if need be, even if they are a generation behind. AMD could be manufacturing on Intel foundries before we know it. Samsung has Exynos in Korea as well, which is better than nothing.
NVIDIA still can make parts in Korea if need be, even if they are a generation behind. AMD could be manufacturing on Intel foundries before we know it. Samsung has Exynos in Korea as well, which is better than nothing.
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I don't see China invading Taiwan, since the U.S. has made it abundantly clear that they'll intervene militarily, and the Chinese know they are (as of yet) no match for the U.S. They'll bide their time. Chinese think in terms of centuries, not decades. The hive's important, not the individual worker.
I do think they'll need to wait a very long time since if the West decouples they'll be thrown back decades if not more, with no hope of ever catching up.
But if a spat were to occur, Apple would definitely be hurt...BIG TIME. In fact, I could even see the company collapse if it were to be cut-off from its supplier base in China and Taiwan.
I do think they'll need to wait a very long time since if the West decouples they'll be thrown back decades if not more, with no hope of ever catching up.
But if a spat were to occur, Apple would definitely be hurt...BIG TIME. In fact, I could even see the company collapse if it were to be cut-off from its supplier base in China and Taiwan.
So the alternative is Samsung fab located in South Korea. Technically Korean war isn't ended and North Korea actively developing missiles.
> For those saying that can't happen, think Ukraine in 2012 or 2018. Russia? Invading? Can't happen.
They "invaded" Crimea in 2013, a lot of people expected what's currently happening.
edit: 2014 not 2013. Also Crimea overwhelmingly supported being annexed into Russia as they were severely mistreated by Ukraine.
There were very clear tensions leading up to both Crimea and Ukraine events.
But using the political events of Ukraine/Russia to support tossing Taiwan to the PRC is not something I agree with.
They "invaded" Crimea in 2013, a lot of people expected what's currently happening.
edit: 2014 not 2013. Also Crimea overwhelmingly supported being annexed into Russia as they were severely mistreated by Ukraine.
There were very clear tensions leading up to both Crimea and Ukraine events.
But using the political events of Ukraine/Russia to support tossing Taiwan to the PRC is not something I agree with.
Incorrect. Crimea was invaded in 2014. My point was that in 2012, it was 2 years before the invasion, and less foreseeable despite how quickly in the grand scheme of things it came afterwards.
Additionally Ukraine is the breadbasket of the world, people thought Russia wouldn’t do this because of how it would mess up the food supply chain… the exact same argument being made for why China can’t invade Taiwan, too many companies rely on it.
The Russian armed forces has had a lot of actual battlefield experience invading Georgia in the ‘00s, bombing Syria in the ‘10s, not to mention its internal bloody counterinsurgency occupation in Chechnya in the ‘90s. The Chinese military hasn’t fought a real war since against Vietnam in 1979, and its navy has had no experience at all since- Korea? The end of the civil war?
War is entirely more uncertain for China, and potentially more destabilizing with more to lose, than it was for Russia.
War is entirely more uncertain for China, and potentially more destabilizing with more to lose, than it was for Russia.
RuAF war experience mostly involved insurgents, or very weakened states (Georgia 08, Ukraine 2014). Ukraine 2022 seems to be a much tougher nut to crack. Even though by now the Russians have 8 more months of intense battlefield experience, they seem to be worse off strategically than at the beginning of the war.
It is in Taiwan's interest to be at least as tough a nut as Ukraine is, and I think they are trying.
It is in Taiwan's interest to be at least as tough a nut as Ukraine is, and I think they are trying.
The PRC constantly skirmishes with India and has land grabbed many islands in the South China Sea, many already occupied.
Yes, since and during the communist takeover of China, all of its military might has generally been directed inwards at it's own people, but they are still a military force and are well organized.
I'd equate the current period of the PRC to the Soviet arms build up of the Cold War.
Yes, since and during the communist takeover of China, all of its military might has generally been directed inwards at it's own people, but they are still a military force and are well organized.
I'd equate the current period of the PRC to the Soviet arms build up of the Cold War.
Yes they have a large and considerably upgraded military, but border skirmishes and planting flags on unpopulated rocks are hardly comparable to Russia’s recent post-Cold War military experience. The point is how the PLA would fare in an actual war is far from known yet.
As far as the Soviet military went, the fallout of that buildup, and the actual condition of the Red Army, are known after the fact now.
As far as the Soviet military went, the fallout of that buildup, and the actual condition of the Red Army, are known after the fact now.
> Yes they have a large and considerably upgraded military, but border skirmishes and planting flags on unpopulated rocks are hardly comparable to Russia’s recent post-Cold War military experience.
Skirmishing against a near-peer like India is probably better preparation for a large scale war against a well-financed enemy with modern equipment, doctrine, and Western support than Russia’s wars against lesser former Soviet states and in support of Syria.
Skirmishing against a near-peer like India is probably better preparation for a large scale war against a well-financed enemy with modern equipment, doctrine, and Western support than Russia’s wars against lesser former Soviet states and in support of Syria.
Were they actually "skirmishing" though? I thought it was mostly border guards scuffling, even engaging in hand-to-hand combat at one point.
What we’ve found out in Ukraine is that much of the military spending has been siphoned off by corrupt leadership. How do we know that the same thing isn’t happening in China?
> What we’ve found out in Ukraine is that much of the military spending has been siphoned off by corrupt leadership
We didn’t find that out in Ukraine, we’ve known that from fairly widely circulated news, often from direct participants in the corruption (such as the people to whom essential gear was sold), consistently since at least the First Chechen War of the mid-1990s (where sales of fuel, weapons, and ammunition by Russian military personnel with custody over them to the enemy were a significant and recurring thing.)
What we have learned in Ukraine is a better idea of the extent of the effect of that longstanding problem on current Russian military capacity.
Now, it could be that China has a similar problem and has been better at keeping it under wraps than Russia has been for the past 30 or so years, but there is not much reason to suspect that.
We didn’t find that out in Ukraine, we’ve known that from fairly widely circulated news, often from direct participants in the corruption (such as the people to whom essential gear was sold), consistently since at least the First Chechen War of the mid-1990s (where sales of fuel, weapons, and ammunition by Russian military personnel with custody over them to the enemy were a significant and recurring thing.)
What we have learned in Ukraine is a better idea of the extent of the effect of that longstanding problem on current Russian military capacity.
Now, it could be that China has a similar problem and has been better at keeping it under wraps than Russia has been for the past 30 or so years, but there is not much reason to suspect that.
> Additionally Ukraine is the breadbasket of the world, people thought Russia wouldn’t do this because of how it would mess up the food supply chain…
No, they thought Russia wouldn’t do it because Ukraine had a Russia aligned government up until just before the invasion.
No, they thought Russia wouldn’t do it because Ukraine had a Russia aligned government up until just before the invasion.
2014.
The cynical side of me senses that what would land with India and Vietnam is labor-intensive, commoditized assembly of parts. "X% of iPhones manufactured in India" is sort of misleading if the bulk of parts are still coming from China. In some ways, I think this is going China's way. They are moving up the ladder into specialized manufacturing and away from manual labor. A smart strategy considering the demographic decline they are to face in upcoming decades.
On the other hand though, it would be foolish to expect the whole industry moving away from another country overnight. It would be a slow process that would start from the labor intensive parts of manufacturing. I think, it'd be a win-win for everyone, including China.
On the other hand though, it would be foolish to expect the whole industry moving away from another country overnight. It would be a slow process that would start from the labor intensive parts of manufacturing. I think, it'd be a win-win for everyone, including China.
The bulk of the parts are not coming from China. Maybe some very commodity assembly and back end steps. But the vast majority of the manufacturing value add happens in Taiwan (semiconductors) and Korea (display).
I imagined the storage and RAM also come from Korea.
Though I wouldn't be surprised if the battery comes from China.
Though I wouldn't be surprised if the battery comes from China.
Last time I checked, storage and RAM are semiconductors.
Memory is of course manufactured in Taiwan, Korea, Japan, Singapore, and China (at Korean owned factories). But you get the overall point
Battery and radios (wifi and LTE/5G) are produced in China from what I recall.
The radios are not produced in China
iPhone displays are also made in China by BOE. They were also intending to use YMTC for NAND but didn't because of political pressure.
Some* are made by BOE. Not enough for Apple to care. 100% of iPhone 14 Pro/Max are made by Samsung.
BOE gets a token allocation, that is true.
Yeah, this makes sense to me.
I have not read the linked article, but I wonder, does it discuss this?
I caught another comment lower down that says the article mentions that labour costs in India are "only 2x" less than the labour cost in China.
As if "only 2x" is "trivial"...
I have not read the linked article, but I wonder, does it discuss this?
I caught another comment lower down that says the article mentions that labour costs in India are "only 2x" less than the labour cost in China.
As if "only 2x" is "trivial"...
There is momentum due to large capital costs associated with building the facility and getting the hardware to perform the manufacturing over there in the first place, etc. When labor costs are low, capex can be a bigger piece of the pie and a larger contributor to the effect
2x a small number is sometimes also a small number.
I speculate that labor is not a significant contributor the cost to produce an iPhone.
I speculate that labor is not a significant contributor the cost to produce an iPhone.
More precisely, assembly labour is not a significant contributor.
There's labour in other parts of the chain that make up a big chunk of the cost - hardware design, software design, firmware, chip design, fabbinig, component manufacture, shipping, retail, warranty repair and whatnot, but those don't happen in China or India, so they won't change if the assembly location changes.
There's labour in other parts of the chain that make up a big chunk of the cost - hardware design, software design, firmware, chip design, fabbinig, component manufacture, shipping, retail, warranty repair and whatnot, but those don't happen in China or India, so they won't change if the assembly location changes.
Its not going fast enough. And to develop a creative class with smart products, they would have to liberalize which they cant. Cant discuss about crypto, if the stasi on the barstool next to you reports you for detention.
Subversive and disruptive industries, need a state that turns a blind eye on them , or else they will not thrive.
Subversive and disruptive industries, need a state that turns a blind eye on them , or else they will not thrive.
You need to start somewhere. I presume over time more of the components will be made closer to the factories where the phones are actually being manufactured.
How was Apple able to maintain its production of iPhones in China during the height of Covid-19 in China?
There is the truth, as in the party wants zero covid. And there is the truth. The party wants to earn money, no matter what. So work is allowed, and ignored, just dont tell Xi and some excessive Covid measures are driven into some unimportant areas for show.
The ilusion of a strong state, the same as russias military ..
The ilusion of a strong state, the same as russias military ..
If you had massive outbreaks at a factory like Foxconn’s largest in Zhengzhou which employs 300,000 people, you would have massive interruptions to production.
Instead, they do extensive testing and quarantining to prevent outbreaks at a factory like that.
So no, it isn’t “performative zero COVID”.
Instead, they do extensive testing and quarantining to prevent outbreaks at a factory like that.
So no, it isn’t “performative zero COVID”.
Most of the workers who work at these factorys are young and fit, and they life and eat on site. So as so often in china, local tax inspector in company inspects shipment, local covid expert certifies zero covid.
Every once and a while a higher up arrives. Before that happens, the workers are checked for covid, some are quarantined and the rest is for a few weeks actually covid free. After the visit nobody cares..
Every once and a while a higher up arrives. Before that happens, the workers are checked for covid, some are quarantined and the rest is for a few weeks actually covid free. After the visit nobody cares..
It would be interesting to speak with a Foxconn employees from that time...
Why can't our own politicians figure that out?
COVID impacted EMS production facilities in the off peak season, so suppliers were able to move production around to different sites to dodge outbreaks. But it did impact production in Spring 2020.
Different sites in China? Was Covid-19 that localized?
This is all part of the "Great Decoupling" that will happen in the next decade. Apple will be hurt by this, no doubt, since it will not be able to find suitable replacement suppliers for some of its components, and it's loath to buy from Samsung, its biggest rival.
Ergo, Apple may go down when push comes to shove and the U.S. government gets into a tangle with China.
Ergo, Apple may go down when push comes to shove and the U.S. government gets into a tangle with China.
Less “affair” and more “long term partnership”. They both grew and developed a lot from it.
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This isn't news -- Apple opened factories in a bunch of SE Asian countries IIRC, and now stands poised to play them off each other since the old model of showing up and being shocked there are human rights abuses in... not just Xinjiang.
Apple's real affair, along with the rest of the tech industry, is with countries like Ireland and Austria are "neutral" in the sense that they allowed untaxed gains to flow into them much like Switzerland did in WWII.
They need to adjust to a world where people may buy their devices every two, three, even five years and hold onto them -- especially since China has control of those rapidly depleting rare earth mineral deposits that you need for the overly thin batteries.
Or folks can switch to Android, who seemed to have gone full Pirates of Silicon Valley and stolen the good features from iOS, last I poked around someone's phone.
(Let's be real: at this point they're just doing tweaks, not coming up with major enhancements.)
Apple's real affair, along with the rest of the tech industry, is with countries like Ireland and Austria are "neutral" in the sense that they allowed untaxed gains to flow into them much like Switzerland did in WWII.
They need to adjust to a world where people may buy their devices every two, three, even five years and hold onto them -- especially since China has control of those rapidly depleting rare earth mineral deposits that you need for the overly thin batteries.
Or folks can switch to Android, who seemed to have gone full Pirates of Silicon Valley and stolen the good features from iOS, last I poked around someone's phone.
(Let's be real: at this point they're just doing tweaks, not coming up with major enhancements.)
>>who seemed to have gone full Pirates of Silicon Valley and stolen the good features from iOS
.......I'm sorry, what? It seems like iOS is "stealing" features from Android every few years, they basically let Samsung and others implement something first, improve it for a couple iterations, then finally they add it to iOS and say "look this is a massive step for iOS!", and I'm sitting there being like......we've had this for at least 5 years, what's the big deal? Just that it's nice and polished? Cool, well done, have a cookie.
.......I'm sorry, what? It seems like iOS is "stealing" features from Android every few years, they basically let Samsung and others implement something first, improve it for a couple iterations, then finally they add it to iOS and say "look this is a massive step for iOS!", and I'm sitting there being like......we've had this for at least 5 years, what's the big deal? Just that it's nice and polished? Cool, well done, have a cookie.
I still think that widgets are an unnecessary Android import that bloats the simplicity of the iOS UX. At the very least they should’ve called it something else. Gadgets?
>.......I'm sorry, what? It seems like iOS is "stealing" features from Android every few years, they basically let Samsung and others implement something first, improve it for a couple iterations, then finally they add it to iOS and say "look this is a massive step for iOS!"
Who knows -- there may have been a time where one was superior and the other inferior but slowly pilfering features, but for right now moving from iOS to Android is like an American considering emigration...
(Where you gonna go... Montreal? If I rolled my eyes any harder, my retinas would literally detach.)
Who knows -- there may have been a time where one was superior and the other inferior but slowly pilfering features, but for right now moving from iOS to Android is like an American considering emigration...
(Where you gonna go... Montreal? If I rolled my eyes any harder, my retinas would literally detach.)
chmaynard(8)