Apple’s latest smartphone could be delayed amid China’s crackdown on labeling with any reference to Taiwan
US House Speaker Nancy Pelosi’s (D-California) controversial visit to Taiwan may have negative ramifications for America’s most valuable company, as new labeling restrictions imposed by Beijing could delay the introduction of Apple’s latest smartphone, the iPhone 14. The website GSMArena first reported the delay.
iPhones were made from chips provided by Taiwanese semiconductor firm TSMC. A lot of handsets are manufactured in China by Pegatron (another Taiwanese partner). In the wake of Pelosi’s visit to Taipei last week, the Chinese Communist Party (CCP) has reportedly vowed to begin enforcing a ban on any references to Taiwan or the ROC (Republic of China) on products entering the mainland.
According to a report on Friday by Japan’s Nikkei press agency, shipments of parts to Pegatron’s plant in Suzhou, west of Shanghai, were disrupted as they were checked for labeling violations. Pegatron has denied any production disruptions, however Apple ordered its suppliers to adhere strictly with new customs rules and not label products. ‘made in Taiwan’Or ‘made in ROC’, Nikkei said.
Violations may result in shipments being confiscated by Chinese authorities or held up at customs. They could also be sent back to China for relabeling. China has made it a requirement that Taiwanese products be labeled under regulations first introduced in 2015. ‘made in Taiwan, China’Or ‘Chinese Taipei’.
Taiwan has governed itself since 1949, when nationalist forces fled to the island after being defeated by the newly declared People’s Republic of China. CCP long opposed Taiwan being called the Republic of China. It considered Taiwan to be Chinese sovereignty.
Beijing, which strongly condemned Pelosi’s visit as undermining China’s sovereignty, reacted by severing military and climate ties with Washington.
There would be serious consequences if trade restrictions were increased due to rising tensions. Pegatron’s Suzhou complex makes products for such major US corporations as Microsoft and Tesla. Apple, Microsoft and Tesla rank among the top five largest US companies, respectively, in market value.
It likely doesn’t help that top Taiwanese executives, including Pegatron Vice Chairman Jason Chen and TSMC founder Morris Chang, were photographed meeting with Pelosi at a lunch hosted by Taiwan’s president, Tsai Ing-wen.
According to Kuo Mingchi, analyst at TF International Securities, Apple took the unusual step in diversifying its production line for the iPhone 14. Kuo stated that the Indian Foxconn factory will begin shipping new iPhones around the time handsets made in China are rolling out. This is expected to happen in the second half this year.
My latest survey indicates Foxconn's iPhone production site in India will ship the new 6.1" iPhone 14 almost simultaneously with China for the first time in 2H22 (India being one quarter or more behind in the past).
— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) August 5, 2022