Apple shifts orders to 2 Taiwan companies due to high defect rate in China's red supply chain

Taiwan News
Date: 2019/11/11
By: Keoni Everington, Taiwan News, Staff Writer

TAIPEI (Taiwan News) — Due to production issues and a high defect rate with a key cog in China's "red supply chain," Apple has transferred orders to Taiwanese manufacturers as it ramps up production of its iPhone 11 and gears up for 5G phones.

Due to problems with production disruptions and low yield rates (high defect rates), Apple has switched orders away from Chinese Printed Circuit Board (PCB) supplier Suzhou Dongshan Precision Manufacturing Co., Ltd, in favor of Taiwan rivals Zhen Ding Technology Co., Ltd. (臻鼎科技) and Flexium Interconnect Inc. (台郡), reported UDN. Suzhou Dongshan is a member company of China's "red supply chain," Chinese technology companies given favorable government treatment to enable them to squeeze out foreign competitors entirely from the production process.

In recent years, China's rapidly rising red supply chain has increasingly robbed Taiwan's manufacturers of Apple's orders. Zhen Ding and Flexium are now leading the counterattack in breaking through the siege of red suppliers with a large-scale order of components from Apple for its newest phones.

As for reports the two companies will be picking up slack for Apple at Suzhou Dongshan's expense, neither company has publicly confirmed or denied the Apple orders. Zhen Ding says that it can meet the requirements of any client, while Flexium said it has a positive outlook toward new market demand and anticipates that production in the first quarter next year will be "a bit busier than usual," according to the report.    [FULL  STORY]