With the increasing velocity of tech development, one must take into consideration the geopolitical relationships involved in the commerce of the process. Perhaps it is these trade sanctions and disagreements that cause issues. Our problem starts at the core of the globalisation. In today’s world, we refer to a couple of different countries interacting with each other. In these interactions, a bunch of countries work together to optimize production. A similar case is with Apple when it comes to its manufacturing requirements.
Apple will be launching its latest iPhones this coming fall, as it does every year. For its iPhones, Apple amalgamates a series of manufacturers to make the final product. For example, it may get its panels from Samsung and its Chips from another manufacturer. Once the company gets these parts, it just assembles them into a single final, over priced iPhone. According to a recent article though, 9to5Mac makes a reference to Apple sending a team to visit Samsung offices in Korea to discuss important matters. In order to fix a forecasted chip shortage, Apple is taking steps to ensure that things do not come to that.
Just like China and the US having recent issues in terms of Trade, Japan and Korea have been facing something similar. The only difference is, the Japan and Korean trade war go back to the second world war. During the war, the Japanese forces imposed many hardships on South Korean citizens. After the war ended and the treaties were signed, the Korean people demanded retribution and compensation for their troubles. Since then, there have been on again, off again disputes between the two countries.
Now the issue comes up about how this issues links to Apple and what significance it may hold. The manufacturing of chips requires certain chemicals to manufacture. The chips we talk about are the SOC for the systems, such as the A11 Bionic chips. These chips are the most essential part of the iPhone and the personal, customised architecture developed by Apple makes it quite efficient enough to make it the market benchmark. Coming back to the problem at hand, the chemicals required to manufacture the chips are imported from Japan. One of the most important items would be photoresists. Photoresists, according to the report by 9to5Mac, would be used in the manufacuturing of the next Generation DRAM chip by Samsung. The trade disputes would cause problems in the manufacturing of the chip and therefore have further negative repercussions.
For starters, Apple being the trillion dollar tech giant that it is, would not be comfortable with the fact that their product, the latest iPhone, would be facing a problem in the manufacturing side of things. It is true that while there may be a trade dispute causing a delay in the manufacturing of the chips. But what one does not realise is the fact that this delay would cause a shortage in supply. Why this would really hurt Apple’s business model is that the iPhones, ever since the iPhone X, have not been doing the business previous ones set as a precedent. Perhaps Apple would not want something as simple as manufacturing faults to keep their supply low. With the low supply, iPhone sales would be hindered quite a bit.
To prevent all of this, Apple has sent its executives to Korea in order to discuss future plans with the company. Perhaps, as they have done with the Airpods, Apple should be looking to expand its business for chip development, outside Korea. This would allow the company to cope with the unforeseen issues.
As mentioned in this article by Appuals, it safeguards the company to cover up for any mishaps or losses. It would also allow Apple to grow even further. Therefore the best step would be to go beyond a single country, to be dependent on it. Just like Apple did with China. For now though, they have to figure out the SOC problem as the next iPhone, however absurd it may look, is right around the corner.