Taiwanese suppliers refuse to lower their quotes for iPhone 7 components

iPhone 6s Plus iFixit teardown image 002

Apple may be forced to amend its purchasing policy when it comes to securing various components that go into its handsets, according to a report Friday by trade publication DigiTimes.

The company’s policy of constantly squeezing profits from suppliers has been challenged by Taiwanese companies who have now refused to lower their quotes for iPhone 7 parts.

Suppliers like advanced packaging technology maker Advanced Semiconductor Engineering (ASE), along with many others under the Foxconn Group, reportedly told the iPhone maker that they “could not be able to accept orders without reasonable profits”.

Apple on its part is said to have pitted Chinese firms against their fellow Taiwan-based counterparts in an effort to get Taiwanese suppliers to lower their prices. DigiTimes asserted that the move might make no sense since the quality of parts rolled out by Taiwan- and China-based suppliers “is standing at different levels.”

Interestingly, neither high-end CMOS maker Largan Precision nor semiconductor foundry Taiwan Semiconductor Manufacturing Company (TSMC), which fabricates Apple-designed chips and Touch ID modules, were asked to reduce their quotes because it is “difficult for Apple to find alternative sources” to replace these two firms.

Foxconn, which assembles Apple products, won’t need to sacrifice its margins to work with the Cupertino firm as the group is expecting lucrative orders regarding Sharp-made displays (Foxconn has recently acquired Sharp).

Photo courtesy repair wizards over at iFixit.

Source: DigiTimes