In order for Apple to make the product effectively and efficiently, they rely heavily on manufacturing outside the U.S. Suppliers can turn out parts in a more cost effective way. It would take about four more dollars to make in the U.S. however, there would be a 33% tax raise and higher labor costs. There are suppliers in more than 30 countries. Most of the sourcing and manufacturing is done in U.S., China, Asia, and Europe [5]. Each manufacturer can deliver individual components and specialize in a particular item [9].
When looking at Apple’s supplier list, there are hundreds of suppliers. Just to give an idea of some, I have listed them below and mapped them as well.
Overseas, LG Display in Seoul, South Korea focuses on the display panel. Japan Display in Tokyo and Innolux in Taiwan supply the iPhone screens. Sony in Konan, Japan supply the front and rear cameras. TDK in Japan does the inductor coils. Toshiba (Minato, Japan) and SK Hynix (Icheon, South Korea) supply Apple with the 16Gb, 64Gb, and 128GB storage. TSMC in Hsinchu, Taiwan provides the Touch ID sensor and fingerprint technology. Catcher Technology in Tainan, Taiwan fixes any glitches that may occur in the technology. STMicroelectronics in Geneva, Switzerland provides the gyroscope along with InvenSense in Grenoble, France [5] InvenSense also supplies a six-axis sensor [6]. NXP in Netherlands supplies the short-range wireless chip [5]. Bosch Sensortec provides the accelerometer [6].
Moving back into the United States, GT Advanced Technology in Mesa, Arizona supply the sapphire crystal furnace component. Samsung in Austin, Texas gives the A8 series chip. GlobalFoundaries partners with Samsung in A series chips out of Matta, New York. Avago Technologies in Fort Collins, Colorado, Texas Instruments in Richardson, Texas, Fairchild Semiconductor and Maxim Integrated both out of San Jose, California provide the phone with chips. Finally, Corning in Harrodsburg, Kentucky supply the gorilla glass [5].
Note: In the map above, the pins are marked where the location of the headquarters of each company is. Each company is usually stationed in several countries. Often times, they all produce the pieces that go to the iPhone assembling process. For example, AKM Semiconductor, who makes the compass, is in Japan, U.S., France, England, China, South Korea and Taiwan. Murata, who supplies the Wi-Fi chip, produces in U.S., Japan, Mexico, Brazil, Canada, China, Taiwan, South Korea, Thailand, Malaysia, Philippines, India, Vietnam, Netherlands, Spain, UK, Germany, Hungary, France, Italy, and Finland [9].
Taking a step back from the manufacturing process, raw materials that are used in the production of many of the parts of the iPhone include glass, silicon, lithium, gold, silver, platinum, copper and indium. The indium is used in indium-oxide to produce the transparent electrodes for the LCD screens [21].
I decided to critically investigate why Apple chose to move the work outside of the U.S. I read an article that says we do not want to make iPhones in the United States. Many people are angry because China is taking American jobs. Foxconn employs 230,000 workers and the Foxconn area called “iPod City” has banks, stores, fire and police stations, as well as a hospital. Apple has 40,000 American employees while Foxconn in total hired over one million employees to make iPhones. Overall, Foxconn has created many jobs. Although the idea sounds good, it isn’t. China’s average manufacturing wage is $2.00 while America’s is $34.75. If Apple tried to produce iPhones in the U.S., they would add $25 billion in labor cost and that would have made Apple go bankrupt a long time ago. People wouldn’t pay the prices they would need to in order to buy the products, therefore, the products would stop being made and improved [7].