iPhone 14: why the China-Taiwan crisis could postpone the release of Apple smartphones

Apple has just found itself entangled in the conflict between China and Taiwan. According to information from Nikkei, a renowned business daily, the Cupertino giant would have asked its Taiwanese suppliers to respect Chinese import rules.

China requires that all components produced in Taiwan be stamped “Taiwan, China” or “China, Taipei”. With this seemingly innocuous rule, the Chinese regime wants to remind us that the island belongs to it.

Introduced several years ago, the measure was not systematically applied by companies in Taiwan. But, following the controversial visit of Nancy Pelosi, the speaker of the American House of Representatives, Beijing has hardened its tone. At the same time, China has organized military exercises around Taiwan. These maneuvers continued beyond the scheduled date. The operations, involving “live-fire” maneuvers, are still ongoing, despite opposition from Western countries.

Related: iPhone 14s Might Finally Charge Faster (But Not Too Fast Either)

Components blocked by Chinese customs

According to “sources familiar with the matter” interviewed by Nikkei, Apple fears that components that do not comply with Chinese law will be blocked by customs. Products that include the mention “Made in Taiwan” may indeed not arrive on time in Chinese factories that are Apple partners, such as Pegatron or Foxconn. A few days ago, components in transit from Taiwan to China were also held for examination.

The situation is all the more complex as the law of Taiwan comes into conflict with the Chinese legislation. The island requires labels to read “Taiwan” or “Republic of China” instead.

Apple is very dependent on components made in Taiwan. The Californian giant relies in particular on chips engraved by TSMC. Once engraved, the chips are sent directly to Chinese factories that assemble iPhones and other brand devices. To avoid disruption, Apple has asked its suppliers to quickly change their labels on boxes and forms for shipments from Taiwan to China.

The production of the iPhone 14 encounters a new obstacle

This geopolitical crisis comes at a very bad time for the American giant. Chinese factories are currently finishing mass production of the iPhone 14, the brand’s new high-end smartphones. As the presentation keynote is fast approaching, Apple cannot afford any delay.

As a reminder, iPhone 14 production has already overcome a plethora of hurdles over the past few months. Apple’s production lines have been particularly hard hit by the shortage of computer chips and the resurgence of the coronavirus in China. Faced with this epidemic outbreak, the Chinese authorities decreed several containment measures last spring. Several factories were forced to close for a while.

Despite these pitfalls, Apple managed to catch up in the current summer. The impact of these setbacks would have been absorbed. Unfortunately, the Taiwan-China crisis may well lead to further disruption. It is not impossible that the production of certain models, including the iPhone 14 Max, which was already experiencing screen problems, will be delayed.

If the difficulties worsen, Apple could theoretically release some iPhones several weeks behind its usual schedule. The brand had already done this in 2020 with the iPhone 12. The range had arrived on the market with several weeks of lag between the models. Except surprise, the keynote will always take place at the beginning of September. Apple has also started recording the presentation video, says Mark Gurman, journalist at Bloomberg, in his Sunday newsletter.

Apple turns to India

In this context, Apple would make every effort to reduce its dependence on China. In recent years, the group has migrated a significant part of iPhone production to India. A Foxconn factory has opened on Indian soil as part of an agreement with the local government.

My latest survey indicates Foxconn’s iPhone production site in India will ship the new 6.1″ iPhone 14 almost simultaneously with China for the first time in 2H22 (India being one quarter or more behind in the past).

— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) August 5, 2022

This summer, the Indian factory of Foxconn has increased its production capacity at the request of Apple. More iPhones can be assembled in the Manufactory. According to information from Ming-Chi Kuo, the financial analyst specializing in Apple products, the factory will produce part of the standard iPhone 14s. This is the first time that a first batch of iPhones has been made outside of China.

“This is an important step for Apple in building a non-Chinese iPhone production site. This implies that Apple tries to reduce the impact of geopolitical problems on supply and considers the Indian market as the next engine of its growth,” explains Ming-Chi Kuo.

Source :

Nikkei