It is possible for Apple Inc to move iPhone production to America, but it would almost double the cost of making the device while creating logistical headaches, according to Bank of America (BofA).
“iPhone cost can increase 25 percent purely on higher labor cost in the US,” BofA analysts led by Wamsi Mohan wrote in a note to clients on Wednesday.
While the tech giant can find domestic labor for assembly, a “significant portion” of parts used in manufacturing the iPhone would still be assembled in China and imported to the US, they added. Assuming Apple has to pay reciprocal tariffs on those imports, its total cost would rise 90 percent or more, they estimated.
Photo: Hector Retamal, AFP
The estimate comes as US President Donald Trump zeros in on China for his trade fight. The Trump administration paused its reciprocal tariffs on dozens of countries for 90 days, but increased its duties on China to 125 percent. Meanwhile, China slapped 84 percent retaliatory levies on American goods.
Fear of price increases spurred iPhone panic buying last weekend, while Apple chartered cargo flights to ferry 600 tonnes of iPhones, or as many as 1.5 million, to the US from India, in an effort to beat Trump’s tariffs, sources told Reuters.
For Apple to make relocating its final assembly of iPhones to the US viable, it would need tariff waivers on components and sub-assemblies manufactured outside of the country, Mohan wrote. However, he doesn’t see this happening.
“Unless it becomes clear as to how permanent the new tariffs are, we do not expect Apple to take the step of moving manufacturing into the US,” Mohan said. “We do expect, however, that Apple will continue to diversify its supply chain, and also increase production of iPhones in other countries such as India.”
As Apple diversifies its manufacturing beyond China, it has positioned India for a critical role. Taiwan’s Foxconn Technology Group (富士康) and India’s Tata Electronics Pvt Ltd, its two main suppliers there, have three factories in all, with two more being built, Reuters reported.
The US government on Wednesday sanctioned more than two dozen companies in China, Turkey and the United Arab Emirates, including offshoots of a US chip firm, accusing the businesses of providing illicit support to Iran’s military or proxies. The US Department of Commerce included two subsidiaries of US-based chip distributor Arrow Electronics Inc (艾睿電子) on its so-called entity list published on the federal register for facilitating purchases by Iran’s proxies of US tech. Arrow spokesman John Hourigan said that the subsidiaries have been operating in full compliance with US export control regulations and his company is discussing with the US Bureau of
Taiwan’s foreign exchange reserves hit a record high at the end of last month, surpassing the US$600 billion mark for the first time, the central bank said yesterday. Last month, the country’s foreign exchange reserves rose US$5.51 billion from a month earlier to reach US$602.94 billion due to an increase in returns from the central bank’s portfolio management, the movement of other foreign currencies in the portfolio against the US dollar and the bank’s efforts to smooth the volatility of the New Taiwan dollar. Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民)said a rate cut cycle launched by the US Federal Reserve
Taiwan’s rapidly aging population is fueling a sharp increase in homes occupied solely by elderly people, a trend that is reshaping the nation’s housing market and social fabric, real-estate brokers said yesterday. About 850,000 residences were occupied by elderly people in the first quarter, including 655,000 that housed only one resident, the Ministry of the Interior said. The figures have nearly doubled from a decade earlier, Great Home Realty Co (大家房屋) said, as people aged 65 and older now make up 20.8 percent of the population. “The so-called silver tsunami represents more than just a demographic shift — it could fundamentally redefine the
Businesses across the global semiconductor supply chain are bracing themselves for disruptions from an escalating trade war, after China imposed curbs on rare earth mineral exports and the US responded with additional tariffs and restrictions on software sales to the Asian nation. China’s restrictions, the most targeted move yet to limit supplies of rare earth materials, represent the first major attempt by Beijing to exercise long-arm jurisdiction over foreign companies to target the semiconductor industry, threatening to stall the chips powering the artificial intelligence (AI) boom. They prompted US President Donald Trump on Friday to announce that he would impose an additional
RSS