The Trump administration's tariff policy, akin to a pebble tossed into a serene pond, swiftly rippled through Apple's consumer base in the United States.

Despite iPhones currently maintaining their price tags, widespread anticipation of future hikes has sparked a wave of "panic buying."

For Apple, restructuring or further adjusting its supply chain appears inevitable. For Chinese firms within Apple's supply chain, while the immediate impact has spared them, diversifying away from their singular reliance on Apple has become a pressing concern.

I. Tariff Panic: iPhone Rush Buying

As early as late March, Apple had commenced stockpiling.

According to foreign media reports, from March 27 to 29, five cargo planes laden with iPhones and other products took off from India, directly landing in the United States.

Unsurprisingly, following the announcement of the "reciprocal tariff" policy in April, Apple stores across the United States witnessed a surge in rush buying.

Foreign media reports indicate that since April 7, sales in Apple retail stores nationwide have significantly increased, far outpacing previous years' figures for the same period.

Employees at Apple retail stores were quoted by foreign media exclaiming, "I've never seen anything like this. It's like a holiday. Everyone is eagerly inquiring and buying."

One shopper told the media, "I think everyone is here out of fear. They don't know what will happen."

Currently, Apple's U.S. warehouses are stocked with over $15 billion worth of iPhones, roughly triple the sales volume in the U.S. market during the fourth quarter of 2024. This stockpiling strategy aims to mitigate the impact of tariffs, ensure a steady product supply in the U.S. market, and prevent shortages or substantial price hikes due to tariffs, thus deterring consumers from switching to other brands.

Previously, on April 2, Trump announced the "reciprocal tariff" policy. On April 5, a 10% "reciprocal tariff" came into effect, and on April 9, tariffs exceeding 125% on China began to be implemented. The latest news reveals that the U.S. tariff rate on some Chinese goods exported to the United States (such as medical syringes, needles, etc.) will reach a maximum of 245%.

Although the "reciprocal tariffs" on regions including India and Vietnam were exempted for 90 days, according to foreign media reports, Apple's supply chain director mentioned at an internal meeting that each day of delay in goods arriving in the U.S. would cost the U.S. warehouse $8 million.

This anticipated loss is also reflected in consumers' expectations of future price hikes. As consumers generally foresee future commodity price increases, this has triggered a degree of rush buying.

UBS analysts stated that due to tariffs, the price of Apple's current iPhone 16 Pro Max (Apple's most premium iPhone) priced at $1,199 may surge by $350 in the United States. Analysts predict that the overall price of iPhones will increase by nearly 30%, depending on the country of origin.

iPhone sales account for over half of Apple's annual revenue. Of the $390.8 billion in revenue generated by Apple in 2024, 51% stemmed from iPhones. Apple is currently selling previously imported iPhone inventory. According to foreign media reports, Apple is likely to feel the tariff impact starting in the fourth quarter of July.

Foreign media reports suggest that manufacturing iPhones in the United States is impractical due to the exorbitant costs for Apple, and the supply chain logistics would be intricate. The price of an iPhone made in the United States would triple, reaching $3,500.

Currently, Apple's global supply chain heavily relies on China, accounting for approximately 70% of global production capacity, while other regions such as India, Vietnam, Thailand, etc., shoulder the remaining capacity.

Even when Trump first initiated a trade war during his first term, Apple had begun restructuring its China-dependent supply chain to address potential tariff risks and geopolitical uncertainties.

Now, with Trump's re-election and implementation of new tariff policies, this may further accelerate the restructuring of Apple's supply chain.

II. Under the Tariff War, Apple Accelerates the Restructuring of Its Supply Chain

In 2017, Apple began producing the entry-level iPhone SE in India for the first time, which was seen as a strategy to meet local demand in India and reduce tariff costs.

From 2018 to 2020, as Sino-U.S. trade frictions escalated, Apple gradually expanded its production scale in India, increasing the assembly of some iPhone 6s, 7, XR, and other models. Simultaneously, Vietnam, as another alternative, began playing a pivotal role in Apple's supply chain, primarily responsible for the production of accessories like AirPods.

From 2021 to 2023, Apple accelerated its production pace in India, gradually transferring more iPhone models, including newer versions, to India for assembly. Meanwhile, Vietnam's share of iPad and Apple Watch assembly continued to rise. Data from India's Economic Times indicates that India's iPhone production capacity accounted for 14% of the global total in 2023.

In 2024, Apple achieved a significant milestone in its Indian production, with the latest iPhone 16 series, including the Pro version, all achieving full-line assembly in India. This transformation signifies India's role in Apple's global supply chain evolving from a supplementary player to an important alternative. Foreign media reported that as of the fiscal year ending in the first quarter of 2025, India produced 20% of Apple's global iPhone production. Moreover, Apple plans to increase India's share of iPhone production capacity to 25% by 2025.

Despite several phases of transfer, Apple has continued to promote the diversification of its supply chain, but its dependence on Chinese manufacturing remains substantial.

Behind this lies China's years of accumulation in the global electronics manufacturing industry. Taking factories like Foxconn in Zhengzhou as an example, the yield rate of iPhones is as high as 98%. In contrast, the current yield rate of iPhones in Indian factories is approximately 85%.

This implies that out of every 100 iPhones produced in China, only about 2 are defective, whereas in India, 15 are defective.

III. What Impact Does It Have on Chinese Apple Supply Chain Companies?

After Trump's tariff policy was announced, Apple supply chain companies listed on the A-share market also announced, through announcements, investment interaction platforms, and the media, that the "impact is limited." For instance, GoerTek responded to investors on an interactive platform by stating that clauses such as FOB are commonly used in consumer electronics exports, and import tariffs are generally borne by the importer, thus the direct impact of relevant tariff policies is relatively limited.

Lens Technology and Lingyi Intelligence both stated in interviews that most of the company's exports are completed through domestic bonded areas, naturally avoiding tariff fluctuation risks.

Sunny Precision mentioned on an interactive platform that the company's overseas business accounted for about 50% of revenue in 2024, and direct exports to the United States comprised less than 3% of revenue. Most of these exports are completed through domestic bonded areas, and trade terms with customers do not require the company to bear the customer's import tariffs. It is anticipated that changes in tariff policies will have a minimal direct impact on the company's overall operations.

In the short term, the impact on companies in the Apple supply chain may not be significant. What is more crucial is that the long-term trend may accelerate, and tariff costs may gradually shift from downstream brand owners to upstream suppliers over time.

Most local Apple supply chain companies in mainland China have minimal direct exports to the United States. These companies primarily supply products to companies like Foxconn, which assembles them into finished mobile phones and then sells them worldwide, with the U.S. market accounting for 30% of global sales. According to Jiemian News statistics, the revenue share of direct exports to the United States for major Apple supply chain companies is generally less than 5% or even 3%.

Many companies with relatively large U.S. exports have long since begun accepting Apple's advice to establish factories in other Southeast Asian countries such as Vietnam and India.

As Apple's most crucial partner, Foxconn took the lead, investing heavily to set up factories in India, undertaking the transfer of iPhone production, and driving iPhone manufacturing in India. Besides India, it also has layout or expansion plans in Vietnam, Mexico, and even the United States (for certain businesses/components) to fulfill Apple's global production and regional supply needs.

Furthermore, companies like Luxshare Precision, GoerTek, and Wistron have also established factories in Vietnam and India. In 2019, Wistron commenced producing older iPhone models in India, and in 2020, nearly 30% of AirPods production capacity shifted to Vietnam.

According to Market Value Observation statistics, a total of 21 Apple supply chain companies established 23 factories in Vietnam in 2021. Among them, the largest number of companies hailed from China, including seven firms—Bern Optics, GoerTek, Lens Technology, Lingyi Intelligence, Luxshare Precision, Meiyingsen, and Yutong Technology—accounting for one-third.

These actions are seen as a response to the trade war during Trump's first term, and this trade war may once again accelerate the establishment of factories in other regions by companies heavily impacted by U.S. tariffs.

For companies, setting up factories overseas is not a straightforward "move." It entails the transfer of production capacity, recruitment of new employees, and navigating various policy processes, which can lead to significant performance fluctuations. Taking Luxshare Precision as an example, its factory in Vietnam lost 7.34 million yuan in 2018 but recorded a net profit of 100 million yuan in 2019.

With the second round of the tariff war looming, the restructuring of cross-border industrial chains, including Apple, is still underway.

Simultaneously, domestic Apple supply chain companies such as Luxshare Precision, Lens Technology, and GoerTek are actively diversifying their layouts to reduce their reliance on Apple. For instance, Luxshare Precision has entered the automotive high-voltage connector market through the acquisition of Leoni AG, with its revenue share continuously growing. Additionally, it has also ventured into the field of AI servers; Lens Technology has also forayed into the automotive and AI hardware industries.