Apple warns suppliers of Chinese retaliation for Pelosi meeting; May affect iPhone shipments

Apple is reported to have warned suppliers about another Chinese act of retaliation over the controversial visit to Taiwan this week by US House Speaker Nancy Pelosi. China’s response may disrupt shipment of iPhone devices and/or components.

China expressed strong dissatisfaction with the visit, and implemented a whole raft of measures – ranging from imposing sanctions on Pelosi and her family, to live-fire military exercises inside Taiwan’s waters. Now an additional amount of revenge has been revealed which is said to be disrupting iPhone production…

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We reported earlier this week that Pelosi met with Apple’s chip maker TSMC during her visit, and it later emerged that she also met with the iPhone assembler Pegatron.

Pelosi’s visit to Taiwan was intended to demonstrate US support for Taiwan at a time when concerns are growing about a possible invasion by China. It was designed to signal to Beijing that the United States is serious about its legal obligation to help Taiwan defend itself against any military attack by China.

However, many expressed concern that the visit was more likely to provoke China than deter it, and it is becoming increasingly clear that this is indeed the case.

Pelosi’s meeting with TSMC was likely regarding CHIPS, and the implications for the company’s plant in Arizona. The Taiwanese company was reportedly wary of suggestions that Intel might get the lion’s share of the subsidies.

Chinese retaliation affects iPhone shipments

We have since learned that Pelosi also met Taiwanese iPhone assembler Pegatron; There have since been reports that China has been blocking shipments from and/or from China’s Pegatron factories.

Apple has warned its suppliers that China is implementing a tariff regulation that could lead to the rejection of import and export orders. Reuters reports.

Citing sources familiar with the matter, the report added, the iPhone maker told suppliers that China had begun to enforce a long-standing rule that parts and components made in Taiwan should be classified as made in either “Taiwan, China” or “Chinese Taipei.” .

So far the rule has been respected more in violation than in compliance, but that has now changed, with China insisting on strict compliance.

There are currently conflicting reports on whether shipping delays affect both imports and exports to and from China, or only movements of parts between Taiwan and China.

While Apple products are marked “Designed by Apple in California, Assembled in China,” shipping documents can describe their origin as Taiwan. It seems likely that only paperwork needs to be changed in order to allow shipments.

If the problem affects the charging of components From Taiwan for assembly In China, the problem would be easier to solve if it was just paperwork, but it would be more troublesome if any of the components themselves were labeled “Made in Taiwan”.

Pegatron is said to have denied that its shipments were affected, but the wording of its responses to media requests appears to be ambiguous. It is stated differently that the company’s statement says its factory is operating normally (which would be the case in both cases); those shipments From Its Chinese factories were not affected. Or that all shipments (including exports) were running as usual.

Either way, the timing of the disruption isn’t great for Apple as it ramps up its iPhone 14 production work ahead of this year’s lineup launch next month.

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