Things got interesting today. Mr. Market didn't like it.
Imagine Ford’s production line in Michigan having to stop because they can’t get one of the circuit boards for the engine computer imported from China. That circuit board represents a small dollar amount of trade, but it could halt a big dollar amount of US production, at least temporarily.
Our supply chains are all interconnected now.
The iPhone's Component Manufacturers
Since there are hundreds of individual components in every iPhone, it's not possible to list every manufacturer whose products are found on the phone. It's also very hard to list exactly where those components are made (especially because sometimes one company builds the same component at multiple factories).
Some of the suppliers of key or interesting parts for the iPhone 5S, 6, and 6S (according to IHS and Macworld), and where they operate, include:
Accelerometer: Bosch Sensortech. Based in Germany, with locations in the U.S., China, South Korea, Japan, and Taiwan
Audio chips: Cirrus Logic. Based in the U.S., with locations in the U.K., China, South Korea, Taiwan, Japan, and Singapore
Battery: Samsung. Based in South Korea, with locations in 80 countries
Battery: Sunwoda Electronic. Based in China
Camera: Qualcomm. Based in the U.S., with locations in Australia, Brazil, China, India, Indonesia, Japan, South Korea, and more than a dozen locations through Europe and Latin America
Camera: Sony. Based in Japan, with locations in dozens of countries
Chips for 3G/4G/LTE networking: Qualcomm.
Compass: AKM Semiconductor. Based in Japan, with locations in the U.S., France, England, China, South Korea, and Taiwan
Glass screen: Corning. Based in the U.S., with locations in Australia, Belgium, Brazil, China, Denmark, France, Germany, Hong Kong, India, Israel, Italy, Japan, South Korea, Malaysia, Mexico, Philippines, Poland, Russia, Singapore, South Africa, Spain, Taiwan, The Netherlands, Turkey, the U.K., and the United Arab Emirates
Gyroscope: STMicroelectronics. Based in Switzerland, with locations 35 countries
Flash memory: Toshiba. Based in Japan, with locations in over 50 countries
Flash memory: Samsung.
LCD screen: Sharp. Based in Japan, with locations in 13 countries
LCD screen: LG. Based in South Korea, with locations in Poland and China
A-series Processor: Samsung.
A-series Processor: TSMC. Based in Taiwan, with locations in China, Singapore, and the U.S.
Touch ID: TSMC
Touch ID: Xintec. Based in Taiwan.
Touchscreen controller: Broadcom. Based in the U.S., with locations in Israel, Greece, the U.K., the Netherlands, Belgium, France, India, China, Taiwan, Singapore, and South Korea
Wi-Fi chip: Murata. Based in the U.S., with locations in Japan, Mexico, Brazil, Canada, China, Taiwan, South Korea, Thailand, Malaysia, Philippines, India, Vietnam, The Netherlands, Spain, the U.K., Germany, Hungary, France, Italy, and Finland
The iPhone's Assemblers
The components manufactured by those companies all around the world are ultimately sent to just two companies to assemble into iPods, iPhones, and iPads.
Those companies are Foxconn and Pegatron, both of which are based in Taiwan.
Conclusion
As you can see, the answer to the question of where the iPhone is made isn't simple. It can boil down to China since that's where all the components are assembled and the final, working devices come from, but it's actually a complex, nuanced worldwide effort to manufacture all the parts that go into making an iPhone.
Thanks, very interesting. And if we included the iPhone software, too, the list and interconnectivities would grow still longer. Then, include the money sent home by expat workers in some of these countries, the dividends paid to non-nationals of the home base of some of these companies, etc and it gets quite hard to say how much each country benefits from the production and sale of an iPhone.I listened to a podcast a few days ago and the supply chain issue completely messes with the calculation of how trade surpluses and deficits are calculated, and those calculations have not kept up with the modern manufacturing world. The iPhone was used an example. Since the final product is supplied by China the whole cost of the iPhone is counted as an export from China instead of the incremental cost that China adds to the iPhone.
https://www.lifewire.com/where-is-the-iphone-made-1999503
I'm not following you. AFAIK, no one is talking about embargoes, just tariffs. It could lead to price increases, but that is the case with all producer/supplier taxes.
Thanks, very interesting. And if we included the iPhone software, too, the list and interconnectivities would grow still longer. Then, include the money sent home by expat workers in some of these countries, the dividends paid to non-nationals of the home base of some of these companies, etc and it gets quite hard to say how much each country benefits from the production and sale of an iPhone.
Yup, it is an incredibly complex situation. Imagine that we forced Apple to assemble iPhones in the US. In China, there are thousands and thousands of people who stand in lines making $2/hr putting them together, but if we were make them in the US, we wouldn’t do it that way. Apple would build highly automated factories, because it would be more cost effective than hiring unskilled Americans to put them together. So they would be hiring engineers and buying massive amounts of robots and automation equipment, but the actual number of lower skilled workers they hired would probably be very disappointing from a jobs standpoint.
Manufacturing is never going to bring back high-paying unskilled work.
For a brief period of time, unionized assembly line jobs used to pay very well (i.e. a single worker could comfortably support a typical family). We can call the jobs "unskilled" or "skilled", but the workers started with the company knowing nothing about their job, and it could be mastered in a short time.Just a point on your last stmt.... I do not think there ever was high paying UNskilled work here anyhow.... there was low pay unskilled work and higher paying skilled work...
For a brief period of time, unionized assembly line jobs used to pay very well (i.e. a single worker could comfortably support a typical family). We can call the jobs "unskilled" or "skilled", but the workers started with the company knowing nothing about their job, and it could be mastered in a short time.
It was a historical blink of an eye, though, and due to a fluke of history that resulted in a shortage of US workers and concomitant strength in their organizing power/ability to demand higher wages.
If things start getting ugly though, wouldn’t you expect China to refuse to sell us something inexpensive that we need if they know that it will disproportionately impact our production? Especially since it would help drive home that the one doing the selling is not universally the one benefiting the most from the trade, contrary to our administration’s belief?
Well, one day after the US imposed tariffs on $50 billion on Chinese goods, the Chinese have answered in kind.
https://www.washingtonpost.com/worl...8134f4-37d8-11e8-b57c-9445cc4dfa5e_story.html
I am supposed to retire this summer. I built in a lot of allowance for a downside, but this could be a shambles. ...........
Although I have purchased carpets in Saudi Arabia, other items in a variety of MENA/S.E. Asian countries, I'm still not certain about the exact point when the expected "Oh yeah, how about...?" oscillations of bartering, morph into a declared Trade War......
It is too bad that politicians do not read their briefing books. They do not even bother reading bills that they pass.When both sides engaged in trade start charging the other more in response to being charged more, a trade war has started.
On a side note, the practice of imposing high tariffs and then exempting individual products, or importers, or other entities one by one was THE common practice back in the Middle Ages, and invariably led to corruption, as the sovereign authority received bribes to exempt this or that product. In fact, many sovereign authorities derived significant income in this manner.
This was one of the practices that capitalism disrupted. I wonder what it means to see its return?