Apple Supplier Pegatron Denies Reports of China Blocking Shipments

[MacRumors]

Apple supplier Pegatron has denied media reports claiming shipments to and from its factories in China were being held for scrutiny by Chinese customs officials, following a Pegatron executive's meeting with U.S. House Speaker Nancy Pelosi (via DigiTimes).

In a filing with the Taiwan Stock Exchange, the company indicated that iPhone production at its China-based sites is continuing as normal and shipments have not been affected.

The reports appeared after Pegatron vice chairman Jason Cheng met with Pelosi on Wednesday at a lunch hosted by Taiwan President Tsai Ing-wen. TSMC founder Morris Chang and chairman Mark Liu were also reportedly among the guests.

Pelosi's visit to Taiwan has angered the Chinese government, which sees the island as a breakaway province that will eventually be part of the country, despite many Taiwanese people considering their self-ruled island to be a separate nation.

In response to the visit, China is currently conducting live-fire military drills in and around the Taiwan strait, with some aircraft and naval vessels reported to have crossed the median line, an unofficial but once largely adhered-to border that separates Taiwan and China. Chinese media on Friday reported that its missiles flew over Taiwan during its latest drills.

Pegatron is the second largest Taiwanese contract electronics manufacturer and iPhone assembler behind Foxconn, while TSMC is the sole supplier of Apple's custom silicon chips and the world's most valuable semiconductor company. All three firms operate plants in China.

Apple has been trying to diversify its supply chain outside of China to reduce its reliance on the country and mitigate the impact of geopolitical unrest, with Vietnam, and more recently India, emerging as important locations for supply chain expansion and investment.

Update: Nikkei reports that Apple on Friday asked suppliers to ensure that shipments from Taiwan to China strictly comply with Chinese customs regulations, which state that Taiwanese-made parts and components must be labeled as being made either in "Taiwan, China" or "Chinese Taipei," language that indicates the island is part of China.

Article Link: Apple Supplier Pegatron Denies Reports of China Blocking Shipments

 

[jonnysods]

Things are heating up over there, it’s going to affect a lot of trade I fear.

 

[Colstan]

Whether you agree with Speaker Pelosi visiting Taiwan or not, here is the context for why this is a big deal to China and U.S. relations with them.

For the Center for Strategic and International Studies, Michael J. Green and Bonnie S. Glaser, explain the United States' "One China" policy:

When the United States moved to recognize the People’s Republic of China (PRC) and de-recognize the Republic of China (ROC) in 1979, the United States stated that the government of the People’s Republic of China was "the sole legal Government of China." Sole, meaning the PRC was and is the only China, with no consideration of the ROC as a separate sovereign entity.

The United States did not, however, give in to Chinese demands that it recognize Chinese sovereignty over Taiwan (which is the name preferred by the United States since it opted to de-recognize the ROC). Instead, Washington acknowledged the Chinese position that Taiwan was part of China. For geopolitical reasons, both the United States and the PRC were willing to go forward with diplomatic recognition despite their differences on this matter. When China attempted to change the Chinese text from the original acknowledge to recognize, Deputy Secretary of State Warren Christopher told a Senate hearing questioner, "[W]e regard the English text as being the binding text. We regard the word ‘acknowledge’ as being the word that is determinative for the U.S." In the August 17, 1982, U.S.-China Communique, the United States went one step further, stating that it had no intention of pursuing a policy of "two Chinas" or "one China, one Taiwan."

To this day, the U.S. "one China" position stands: the United States recognizes the PRC as the sole legal government of China but only acknowledges the Chinese position that Taiwan is part of China. Thus, the United States maintains formal relations with the PRC and has unofficial relations with Taiwan. The "one China" policy has subsequently been reaffirmed by every new incoming U.S. administration. The existence of this understanding has enabled the preservation of stability in the Taiwan Strait, allowing both Taiwan and mainland China to pursue their extraordinary political and socioeconomic transitions in relative peace.

 

[DHagan4755]

If I were running Apple I would move everything out of China. Rewarding a communist authoritarian regime like China only emboldens China.

 

[Whathappened]

If I were running Apple I would move everything out of China. Rewarding a communist authoritarian regime like China only emboldens China.

It’s a state capitalist authoritarian regime. Or do you also believe the “Democratic People's Republic of Korea” is a democracy?

 

[opeter]

If I were running Apple I would move everything out of China. Rewarding a communist authoritarian regime like China only emboldens China.

Make America great again?

May I ask, why Apple isn't manufacturing their stuff in the US of A only? Ah, of course, the salary and work is much more expensive in their homeland. So, what to do... what to do? Poor Tim Cook.

 

[TheYayAreaLiving 🎗️]

Get out of China 🇨🇳 Apple, please. Enough is enough!

 

[ilikewhey]

If I were running Apple I would move everything out of China. Rewarding a communist authoritarian regime like China only emboldens China.

go ahead, you be voted out by the board in less than a day 😂

 

[Corsig]

It’s time to get out of China. What more is it going to take?

 

[TheYayAreaLiving 🎗️]

It’s time to get out of China. What more is it going to take?

Why can’t Apple ask those supplier companies to move to India and Vietnam? I just don’t understand.

 

[ponzicoinbro]

Wish China would stop over reacting.

There is no reason why China cannot be like Japan, Taiwan and South Korea.

It is in China’s benefit to become like them.

Can you imagine how good it would be for their economy and for relations?

They just over react and oppress for no reason.

Muhhh mao bible muhh party doctrine muhh muhh 5 year plan muuuhhh how come we have pandemic every decade….muh

 

[planteater]

I have no issues with manufacturing in China. I just don't think that any one country should have exclusivity to any part of the manufacturing chain, from component to assembly. Diversification in that regard is more than just good business, it's a matter of business survival. So keep the chain in China, but fully replicate it in other regions.

 

[ilikewhey]

Why can’t Apple ask those supplier companies to move to India and Vietnam? I just don’t understand.

because india is a notoriously difficult place to do business. wide spread corruption follow by unpredictability, govt hurdles on every level.

 

[I7guy]

Make America great again?

May I ask, why Apple isn't manufacturing their stuff in the US of A only? Ah, of course, the salary and work is much more expensive in their homeland. So, what to do... what to do? Poor Tim Cook.

Not to mention the US really doesn't want manufacturing...even though it tries to look like it does.

 

[BornAgainMac]

When I saw Chinese military units in the news, it reminded me of a 32-bit Mac game called Command & Conquer Generals. You get classic phrases like "Overlord is waiting", "We defend China's airspace", "It is very hot in here", "Gun barrels spinning", "Need a bullet barrage?", "Laptop in hand", and "We are pretty busy here".

 

[chfilm]

Scary how over in China people seem to be eager to start a conflict.

 

[VulchR]

I initially wrote a long rant against the petty aggressiveness of the PRC, but I've been suspended recently for political discussion, so... Suffice to say I as a consumer I would be happier if Apple and other western countries took out as much production from the PRC as possible. The precision machinery used to make iPhones and other beloved gadgets might be used later for missiles. Don't feed the dragon, lest you get burnt.

I'd say I would be boycotting Apple products made in the PRC, but I am boycotting Apple products for other reasons ATM.

 

[one more]

Why can’t Apple ask those supplier companies to move to India and Vietnam? I just don’t understand.

A different work culture, education, etc. And Vietnam does not have a very rosy history with the US either.

 

[jlc1978]

Wish China would stop over reacting.

There is no reason why China cannot be like Japan, Taiwan and South Korea.

It is in China’s benefit to become like them.

Can you imagine how good it would be for their economy and for relations?

They just over react and oppress for no reason.

Power and money. None of the CCP leaders want to give up their cush gigs.

I have no issues with manufacturing in China. I just don't think that any one country should have exclusivity to any part of the manufacturing chain, from component to assembly. Diversification in that regard is more than just good business, it's a matter of business survival. So keep the chain in China, but fully replicate it in other regions.

I agree. Africa is another place to look. Botswana, for example is stable and well governed.

Another approach would be to design equipment for more fully automated production to lessen the need for manual labor. Designing an iPhone, for example, as essentially a full phone on a chip with minimal connections designed to be put together by a specialist robot would support moving production on shore to the US and the EU as the labor % of total costs would be low. A few highly paid techs vs loads of manual assembly workers.

 

[one more]

Scary how over in China people seem to be eager to start a conflict.

Who says they want to start a conflict? People in China ≠ Chinese government, same goes for Russia, the US and most other countries around the world.

 

[ilikewhey]

When I saw Chinese military units in the news, it reminded me of a 32-bit Mac game called Command & Conquer Generals. You get classic phrases like "Overlord is waiting", "We defend China's airspace", "It is very hot in here", "Gun barrels spinning", "Need a bullet barrage?", "Laptop in hand", and "We are pretty busy here".

man i miss that game, red alert was fun.

 

[one more]

If I were running Apple I would move everything out of China. Rewarding a communist authoritarian regime like China only emboldens China.

It is a good idea, yet very difficult to implement, as China is a de facto world factory, making everything from post-Covid world-famous surgical masks to irons to TV-sets to semiconductors. Have an interactive game with your household and find an item which does not have “Made in China” tag/label. Sad, but real…

 

[BBCWatcher]

I have to assume Apple has some sort of contingency plans if it's no longer possible to manufacture their products in China. On the short list (I suspect): Vietnam, Mexico, Malaysia, Indonesia. All of these other countries have certain shortcomings, and so does China.

 

[VulchR]

When I saw Chinese military units in the news, it reminded me of a 32-bit Mac game called Command & Conquer Generals. You get classic phrases like "Overlord is waiting", "We defend China's airspace", "It is very hot in here", "Gun barrels spinning", "Need a bullet barrage?", "Laptop in hand", and "We are pretty busy here".

I remember Balance of Power and how nobody could win the game (avoid nuclear war) when there were more than 2 superpowers (the phrase 'This is of importance to my people' usually meant nuclear war). Now we have NATO, Russia, the PRC, India and a host of less powerful agitators like North Korea and Iran. I do not think this bodes well.

 

[one more]

Wish China would stop over reacting.

There is no reason why China cannot be like Japan, Taiwan and South Korea.

It is in China’s benefit to become like them.

Can you imagine how good it would be for their economy and for relations?

They just over react and oppress for no reason.

Muhhh mao bible muhh party doctrine muhh muhh 5 year plan muuuhhh how come we have pandemic every decade….muh

I would not worry much about the Chinese economy, considering the USA is heading for inflation: