After the United States President-elect Donald Trump promised tax incentives to Apple to build “Made in USA” iPhones, Japanese outlet Nikkei reported that Tim Cook & Co. already asked back in June its contract manufacturers Foxconn and Pegatron to look into assembling iPhones domestically. Foxconn reportedly complied, but don’t expect other Chinese vendors in Apple’s vast supply chain to follow suit.
As reported Wednesday by Chinese-language outlet qq and cited by trade publication DigiTimes, most Chinese supply chain makers will not follow Foxconn even if Apple decides to shift production to U.S.
That’s because moving production into the United States would incurred additional costs in environmental accommodations, in addition to higher labor and operating costs. China-based iPhone cover glass maker Lens Technology specifically indicated it will not set up production lines in the U.S. due to labor supply despite the fact that power and land costs are lower in the U.S. than in China.
Lens Technology employs about 70,000 workers, aged below 45. By contrast, most labor in the U.S. is older that 45 years, the company said, adding that many workers in the U.S. are reluctant to accept varying working schedules.
With many parts that go into iPhones being produced in Asia and sourced from Chinese and Taiwanese suppliers, moving Apple handset production to the U.S. is easier said than done. Apple would need to move its entire supply chain to the U.S., including makers of display panels, lens modules, touch panels, batteries, cases and so forth.
These vendors are all within spitting distance of each other and can adapt quickly to changing market conditions. One unnamed supplier said that molding metal components to order takes ten days in Shenzhen versus up to one month in the U.S.