News Column

Apple to Diversify Manufacturing in China

May 30, 2013
Apple CEO Tim Cook

U.S. technology giant Apple Inc. is diversifying its manufacturing base in China, sources told The Wall Street Journal.

In recent years, Apple's supplier for mobile devices has been Foxtronn Technology Group, which has also become famous for brutal worker conditions and for a spate of suicides that made headlines that reflected poorly on Apple, as well as on Foxtronn.

Foxtronn made news last year by making iPhone 5 devices with scratches on the back due to a manufacturing "glitch," the Journal reported Wednesday. A relatively unknown rival, Pegatron Corp., has agreed to work for Apple with smaller profit margins than Foxtronn -- 0.8 percent compared with 1.7 percent, the Journal reported.

Pegatron began making iPhones in 2011 and the iPad Mini tablet in 2012, the newspaper said.

It even built the first generation iBooks in 1999, but a massive earthquake in Taiwan shut down production.

"At that time, there were a lot of Apple people in my factory, telling us to find a solution. I bought a lot of power generators, and we even used candles on the packing line," Pegatron Senior Vice President Andy Tsai said.

Pegatron, which had revenues of $7.4 billion in the first quarter, has a workforce of 100,000 and that is expected to grow by 40 percent, the company's chief financial officer, Charles Lin, said. Analysts said the growth is attributable to a deal to make the iPhone 5.

Foxtronn is the world's largest electronics manufacturer with January-to-March revenue of $27.3 billion.

Source: Copyright UPI 2013

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