Apple caught between suppliers in Taiwan and assemblers in China; Possible iPhone 14 delay

China’s communist government got its hands dirty last week when House Speaker Nancy Pelosi (D-Ca) visited Taiwan. China saw this as a violation of the “One China” policy that the United States has adhered to for fifty years. This policy states that the U.S. government “recognizes that all Chinese on either side of the Taiwan Strait maintain that there is only one China and that Taiwan is part of China” and the United States “does not dispute not this position”.

The People’s Republic of China believes that the United States has violated its “One China” policy

While the US has an official relationship with the People’s Republic of China (PRC), it has an “unofficial” relationship with Taiwan which the PRC says was made official with Pelosi’s visit. As a result, the country showed military strength by flying 68 warplanes off the coast of Taiwan, sending warships to the Taiwan Straits and sending drones to Japan while Pelosi was in Taiwan. . The PRC also decided to end the discussions it had with the United States on various topics.

Taiwan is where many big US tech companies, like Apple, source their chips. Taiwan Semiconductor Manufacturing Corp. (TSMC) is the world’s first independent foundry and counts Apple as its number one customer. Apple today told its Taiwan-based suppliers, including TSMC, that when shipping parts and components to China, they must comply with new Chinese regulations that include labeling supplies as manufactured. to “Taiwan, China” or “Chinese Taipai”.

If the RPC’s requests sound like a request you’d hear from a petulant child, you’d be absolutely right. Asking Taiwanese suppliers to do this is nothing more than the PRC acting like a bully to let everyone know who Taiwan really belongs to.

The reason for Apple’s warning to its Taiwan-based suppliers is due to China’s decision to suspend supplies sent by Taiwanese suppliers to Pegatron’s Suzhou factory in China, which manufactures some products for American companies. like Microsoft and Taiwan. These shipments are detained by PRC Customs and all shipping documents and containers are scrutinized to ensure that they do not mention Taiwan or its official nickname “Republic of China”.

Pegatron Vice President Jason Chen and other Taiwanese chip industry executives were photographed with Pelosi further angering the PRC. Apple has made it clear to its supply chain today that this is a pressing matter, especially now with the assembly of the new iPhone 14 series. Reports indicate that non-Pro iPhone 14 and iPhone 14 Max have display issues and camera lens cracking.

With the unveiling of the 2022 iPhone models just weeks away, that’s the last thing Apple needs

the last thing Apple now needs to dispose of supplies destined for the iPhone 14 series assembly line rejected by customs and sent back to Taiwan. Marking “Made in Taiwan” on any of China’s import declaration forms or actual shipping cartons could result in these shipments being blocked or rejected. Additionally, a fine of up to ¥4,000 (US$592) may also be imposed.

But yeah, here’s the catch. On the other hand, Taiwan requires that all exports bear a label indicating the origin of the shipment, which means that they must be stamped “Taiwan” or “Republic of China”. This is of course exactly what Chinese customs do not want to see. In order to avoid supply chain disruptions, Apple has warned its Taiwan-based suppliers to develop some sort of contingency plans.

Apple has also instructed its supply chain to review and modify carton labels and forms for shipments from Taiwan to China, if necessary, according to those familiar with the situation. Chip shortages and supply chain issues are a huge headache for Apple right now and with the tough times going, Apple needs to stay diplomatic.

About Candace Victor

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