Foreign-owned factories in Taiwan to benefit from Apple supply chain

Manufacturing in Taiwan to get a boost from foreign firms’ operations

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(Image courtesy: Apple Inc.)

(Image courtesy: Apple Inc.)

TAIPEI (Taiwan News) -- Following the release of Apple Inc.’s list of suppliers for 2017, not only were Taiwanese companies included as major suppliers for the tech giant but foreign-owned and funded factories in Taiwan were also beneficiaries of Apple’s procurement plan.

Among the top 200 suppliers listed, there are a total of 39 factories in Taiwan with at least 11 being foreign-funded. Only six Taiwanese companies, including Foxconn, Catcher Technology Co., Ltd. (可成科技股份有限公司) and Yageo Corp. (國巨公司), were included in this year’s Apple supply chain.

Foreign firms with operations in Taiwan that will benefit from the Apple supply chain include US-based semiconductor manufacturer Texas Instruments, US-based glass substrate manufacturer Corning Inc., Dutch semiconductor manufacturer NXP Semiconductors N.V., Japan-based electronic equipment producer NOK Corp. and US-based multinational conglomerate 3M Company.

While companies such as U.S.-based semiconductor device manufacturer Micron Technology, Inc. have a manufacturing facility in Taichung, the multinational companies also produce products and components for Apple around the world. Even domestic companies like Foxconn and Taiwan Semiconductor Manufacturing Co. (TSMC) have manufacturing facilities outside Taiwan.

The 11 foreign-funded factories are mainly spread around Tainan, Hsinchu, Taichung, Taoyuan and Kaohsiung.

For the first time since it went public in 1991, Foxconn reported a year-on-year decline in revenue in 2016 that it attributed to weaker demand from Apple, according to Japan’s Nikkei. The company’s revenue fell 2.81 percent in the year despite a 9.76 percent year-on-year increase in December. Meanwhile, its competitor Pegatron Corp. (和碩聯合科技股份有限公司) recorded a 27.43 percent decline in sales in the same month.

Foxconn’s decline in annual revenue correlated to Apple’s first decline in revenue since 2001, and Apple accounts for over 50 percent of Foxconn’s annual revenue.

Industry reports indicate that the Apple supply chain will begin delivering parts and components for the next-generation iPhone earlier than in previous years, with shipments beginning at the end of the first quarter this year, Digitimes reported. The iPhone 8 is expected to launch in September.