WASHINGTON — Apple’s global supply chain remains overwhelmingly anchored in China, despite a decade of promises and policy pressures to diversify, according to a new report from the American Enterprise Institute.
The report, authored by Chris Miller and Vishnu Venugopalan, reveals that while Apple has expanded its manufacturing presence in India and Southeast Asia since 2018, China still dominates both the number of facilities and the value chain’s core components.
“Apple has begun to shift its supply chain—but that change has been more limited than headlines might suggest,” the authors wrote. “Factories based in China still play a critical role”
In 2013, Apple relied on China primarily for final assembly. Today, many components are also made in China, not just assembled there. Yet the study highlights a key nuance: most of Apple’s high-value components—such as semiconductors and displays—are still manufactured by Japanese, Taiwanese, or American firms operating in China, not Chinese companies themselves.
“Chinese firms have made more progress in lower-tech, lower-profit-margin segments of the supply chain,” the report said, “while foreign firms remain well represented in higher-tech, higher-margin segments”
The data shows that even where production has moved, ownership hasn’t necessarily followed. For example, in Apple’s printed circuit board segment, the majority of factories are located in China, but nearly all are owned by Taiwanese firms. Only one was Chinese-owned as of 2023.
Similarly, in precision manufacturing—a category that includes components like speaker grills and camera housings—Apple now relies almost entirely on Chinese-owned firms. This marks a shift from a decade ago, when nearly all suppliers in that segment were headquartered in the U.S. or Japan
One of the more notable shifts has been in battery sourcing. “While over half of Apple’s battery component sourcing locations remain in China, above 40 percent of locations are now outside China,” the report states, highlighting India, Southeast Asia, and non-Chinese firms from Germany and South Korea as growing suppliers
Apple’s modest relocation of some manufacturing—such as iPhone assembly in Tamil Nadu, India, and AirPods in Vietnam—hasn’t erased China’s central role. “The total share of factories in China has fluctuated around 40 percent for the duration of our data,” the report found, with growth in India and Vietnam focused mainly on low-complexity segments like assembly, packaging, and connectors
The report also casts doubt on the effectiveness of using tariffs as a tool to change trade flows. “The assembly process for devices like phones often only costs around $10—a tiny fraction of the sales price,” the authors noted. “Understanding the economic implications of the manufacturing base of a firm like Apple requires digging deeply into its supply chain, not simply looking at where its devices are assembled”
Despite political pressure, economic shifts, and rising labor costs, China remains the linchpin in Apple’s global manufacturing engine. While the “China plus one” strategy is taking shape on paper, the report concludes, “Apple’s supply chain has evolved—but far less than it might appear.”
Editor: Gabriel Ani
