Apple (AAPL) is one of the most valuable companies in the U.S., with a market cap of over $3.05 trillion as of July 2023. A big part of its success has come from its ability to be a true innovator in personal technology. Millions of customers are willing to pay top dollar for the quality, design, and features of Apple devices, making products like theiPhone, iPad, Mac, and Apple Watch top sellers.
To achieve this greatness, though,Apple doesn't depend on its own manufacturing alone. It has hundreds of suppliers it relies on for procuring components for assembly.
Key Takeaways
- Apple releases a supplier list annually.
- Apple has established high standards for managing supplier relationships.
- Apple’s 2022 suppliers list reports on 200 suppliers and over 600 production facilities.
Apple puts a great deal of effort into monitoring its suppliers. These relationships help to make the tech giant a manager of one of the most efficient supply-chain management systems on the market. Each year it releases a progress report outlining its supplier relationship efforts as well as a list of its top 200 suppliers, which account for 98% of its procurement. Below are 18 of the most prominent.
Taiwan-Based
Taiwan is one of the top areas of Apple's suppliers, although many Taiwanese suppliers have major locations in China and other countries.
Hon Hai Precision Industry (Foxconn)
Hon Hai Precision Industry, which trades as Foxconn internationally, is one of the major reasons that Taiwan is on the map for Apple. Foxconn is one of Apple’s oldest and largest suppliers. The company has its headquarters in Tucheng, New Taipei City.
Although based in Taiwan, Foxconn is often thought of as Apple’s largest China supplier because of its vast number of Chinese supplier locations. Foxconn also helped Apple branch out to India with one location there, as well as manufacturing in the United States and Vietnam.
Compal
Compal Electronics Incorporated is one of Apple's manufacturers of the iPad and the Apple Watch, with locations in mainland China, Vietnam, and Thailand. Its headquarters is in Taipei City, Taiwan.
Quanta Computer
This notebook computer manufacturer conducts research and development in Taiwan, with manufacturing in that country as well as U.S., Europe, and Asia. Quanta is one of Apple's Macbook manufacturers.
Taiwan Semiconductor Manufacturing Company
Known as TSMC, the Taiwan Semiconductor Manufacturing Company produces chips for Apple's iPads, iPhones, Watches, and Macs. Its Apple production facilities are located in Shanghai, Taiwan, and Washington state.
Wistron
Wistron is another Taiwan-based company that’s also helping Apple expand into India. Wistron has two supplier locations: China and India. A focus for Wistron in India has been printed circuit boards for iPhones.
Pegatron
Pegatron is another company rounding out the Taiwan lineup. It has its headquarters in Taiwan, with supplier sites in China and India. Pegatron is similar to Foxconn in that it provides iPhone assembly.
China-Based
In general, China is a very important global region for Apple. The 2022 suppliers list shows Chinese and Hong Kong-based suppliers growing to account for a larger share than America and Japan. By physical location, China accounts for 156 of the total 615 production facilities. However, Apple has shared some concern over its dependence on China, given the 2020 coronavirus outbreak as well as tariff rule changes under the Trump administration.
GoerTek
GoerTek and Luxshare are two Chinese companies that have been in the Apple supplier spotlight. Both companies agreed to set up productions in Vietnam to improve the manufacturing cost efficiency of the Airpod. Goertek has two supplier locations in China and one in Vietnam. The company has its headquarters in Weifang, China.
Luxshare
Luxshare is also in partnership with Apple for the production of the Airpods. It has six supplier locations in China and one in Vietnam.
U.S.-Based
Despite its reliance on an international supply chain, Apple is also still very dependent on many companies in the U.S., including 3M (MMM), Broadcom (AVGO), Qualcomm (QCOM), Intel (INTC), Jabil (JBL), On (ON), Micron (MU), and Texas Instruments (TXN). Other U.S. companies also include Qorvo (QRVO), Skyworks (SWKS),and Corning (GLW).
Broadcom
Broadcom helps Apple produce chips and components for wireless charging. Headquartered in San Jose, Calif., Broadcom maintains supplier locations in Singapore, Taiwan, Colorado, and Pennsylvania.
Corning
Corning is the glassmaker behind Apple's Gorilla Glass, a tough and scratchproof glass used in drop-resistant device screens. Corning's headquarters is in Corning, N.Y.
Micron
Semiconductor manufacturer Micron produces some of Apple's memory chips. The American-based firm is headquartered in Boise, Idaho, with supplier locations in China, Japan, Singapore, and Taiwan.
Qualcomm
NASDAQ-listed Qualcomm is a world leader insemiconductor, mobile, and telecom products and services. It is known to supply multiple electronic components to Apple, includingenvelope power trackers, baseband processors, power management modules, and GSM/CDMA receivers and transceivers. These are various instruments used in device power management systems and in mobile signaling. Qualcomm has also come through for Apple devices,offering necessary modemtechnology.
Modem technology is however at the core of the Apple, Intel, and Qualcomm 504 disputes. Apple announced it was buying Intel’s smartphone modem business. This led to a lawsuit by Qualcomm which resulted in maintaining the modem manufacturing relationship for Qualcomm even after the Intel acquisition.
Intel
In July 2019, Apple announced its agreement with Intel to acquire the majority of its smartphone modem business. With the acquisition, Apple broadened its patent ownership and set up a strong plan for 5G development. Moreover, after the acquisition, the Mac used Intel processors, but in late 2020 began transitioning to Apple silicon in Mac computers. On the 2022 supplier list, Intel reports supplier locations in the U.S., Ireland, Vietnam, and Malaysia.
Japan-Based
Murata Manufacturing Ltd.
Murata (MRAAY)is based inKyoto, Japan. It supplies Apple from18 manufacturing facilities spread across Malaysia, Japan, Taiwan, Thailand, Vietnam, China, and Singapore. It has 10 supplier sites in Japan.
Apple and Samsung are Murata’s top two clients, procuring ceramic capacitors from the company. These electronic parts are used to control the flow of electricity in electronic devices.
Sharp
LCD panels producer Sharp, based in Sakai, Osaka, Japan, is a partially-owned subsidiary of Foxconn. Sharp's supplier locations are in China, Vietnam, and Japan.
Sony
Sony produces camera and electronic components for Apple, with six supplier locations in Japan and one in Thailand. Sony's headquarters is in Tokyo.
South Korea-Based
Samsung
Samsung has its headquarters in South Korea. It supplies multiple components, including flash memory used for storing data content, the mobile DRAM used for multi-tasking various applications in devices, and the application processors responsible for controlling and keeping devices running.
Despite being a competitor to Applein the mobile phone market,Samsung uses its supplier statusto reduce its own component manufacturing costs via bulk production.
LG
Apple added LG Innotek as an additional supplier of its displays, beyond what it sources from Samsung. LG Innotek operates supplier locations in South Korea, where it is based, as well as Vietnam.
Apple's Relationships with Suppliers
Apple is known to maintain one of the best-managed supply chains in the world. Using its stature and global reach, the tech giant is able to demand high-quality products and impose stricter terms on its suppliers.
Apple has hundreds of such suppliers willing to abide by the terms Apple sets forth. What's more, by outsourcing its supply chain and assembly operations, Apple can do what it does best—concentrate on designing great products that offer rich functionality and are easy to use.
On the flip side, being associated with a brand like Apple can be a remarkableboonfor a supplier firm. Apart from the small novice firms, who may derive much of their business from Apple, even larger companies like Samsung use the relationship to their advantage. As noted,Samsung continues to compete with Apple in the mobile phone market; however, large orders from Apple allow Samsung to increase bulk production, which reduces manufacturing costs for its own mobile phone components.
Another advantage for suppliers is that Apple has a reputation for innovation. Regardless of how specific products have performed and despite missteps that have occurred,peopleexpect Apple to come out with something new on a regular basis and eagerly anticipate these products. To a certain extent, this shields Apple suppliers,whowill continue to see new demands for their goods and services.
It should be noted, however, that failing to please Apple can spell doomsday for a small or medium-sized supplier that has built its business around Apple product sales. If suppliers do not maintain high-quality goods at the right price, Apple has the positioning to replace them with another competitor.
How Many Suppliers Does Apple Have?
Apple has hundreds of suppliers, with its most recent supply list documenting the 200 that make up 98% of its procurement spend.
What Is Apple's Largest Supplier?
One of the largest suppliers for Apple is Foxconn. This Taiwan-based company, also known as Hon Hai Precision Industry, provides production and manufacturing of Apple's most popular products, including the iPhone.
Where Does Apple Source Its Raw Materials?
The raw materials that Apple uses to produce its products, including cobalt, lithium, and other rare earth minerals, are sourced from around the world. In the firm's 2022 Conflict Minerals Report, it noted an ongoing commitment to recycling more of its "3TG" components—tin, tantalum, tungsten, and gold—to reduce the impact on countries such as the Democratic Republic of Congo and other nearby nations.
The Bottom Line
Apple needs suppliers, and suppliers need Apple. It'sa streamlined relationship that is often mutually beneficial, though at times it can create tension. Suppliers have major exposure to Apple and its overall market performance.Financial reportsof supplier companies are frequently used by market analysts to project sales for Apple products, and investors also often look to Apple’s underlying suppliers for insights on Apple’s performance as well as more granular investment opportunities independently.
As an enthusiast deeply immersed in the intricacies of Apple's supply chain, it's clear that the company's success is not solely attributed to its iconic devices but also to the intricate web of suppliers strategically positioned across the globe. Apple's market capitalization, soaring over $3.05 trillion as of July 2023, is a testament to its position as a tech giant. The meticulous management of its supply chain, coupled with a relentless pursuit of innovation, has propelled Apple to be a leader in personal technology.
One key aspect of Apple's supply chain management is its annual release of a comprehensive supplier list. This list, encompassing around 200 suppliers and over 600 production facilities, highlights Apple's commitment to transparency and accountability in its relationships. The company has set high standards for managing these relationships, ensuring that its suppliers adhere to stringent quality and ethical standards.
Taiwan emerges as a crucial hub in Apple's supply chain, hosting prominent players like Hon Hai Precision Industry (Foxconn), Compal, Quanta Computer, Taiwan Semiconductor Manufacturing Company (TSMC), Wistron, and Pegatron. These companies play pivotal roles in the manufacturing of various Apple devices, from iPhones to MacBooks.
Foxconn, often associated with China due to its numerous supplier locations there, is a key contributor to Apple's supply chain, with a significant presence in Taiwan. Similarly, Compal and Quanta Computer, based in Taiwan, are vital manufacturers of iPad, Apple Watch, and MacBook devices, showcasing the diversity of Apple's product range.
TSMC, another Taiwanese giant, specializes in producing chips for a range of Apple devices and operates production facilities in Shanghai, Taiwan, and Washington state. Wistron and Pegatron, also based in Taiwan, contribute to Apple's global expansion, particularly into India.
China holds a prominent position in Apple's supplier landscape, with companies like GoerTek and Luxshare playing crucial roles in the production of AirPods. Despite concerns over dependence on China, Apple strategically diversifies its supplier locations.
In the United States, Apple maintains partnerships with several key companies, including Broadcom, Corning, Micron, Qualcomm, Intel, and others. These companies supply components ranging from wireless charging chips (Broadcom) to Gorilla Glass (Corning) and memory chips (Micron).
Japan is represented by companies like Murata Manufacturing Ltd., Sharp, and Sony, with Murata being a significant supplier of electronic components used in Apple products, such as ceramic capacitors.
South Korea, home to tech giants Samsung and LG, is a notable player in Apple's supply chain. Despite being competitors in the mobile phone market, Apple's large orders to Samsung contribute to bulk production, reducing manufacturing costs for Samsung.
The intricate dance between Apple and its suppliers is a finely tuned symphony, with Apple leveraging its global reach and reputation for innovation to demand high-quality products. Suppliers, in turn, benefit from the association with Apple, gaining exposure and stability, though the high standards set by Apple leave little room for complacency.
In conclusion, Apple's supply chain is a complex network of global partnerships that reflects the company's commitment to quality, innovation, and strategic diversification. This meticulous approach positions Apple as a leader not only in product design but also in efficient supply-chain management.
