Taiwan ODMs Refuse Apple’s Request to Lower Quotes for iPhone 7

Apple may be forced to amend its purchasing policy when it comes to securing various components that go into its handsets, according to a report Friday by trade publication DigiTimes.

The Cupertino company is asking for lower component rates despite a 30% reduction in order volume. Apple’s request excludes TSMC and Largan Precision. The former will be fabricating the company’s A10 chipset for the iPhone 7 in its foundries, while the latter will be supplying it with camera modules. A key reason behind their exclusion is the fact that Apple cannot find a reliable alternatives for both these companies in China.

Apple’s request, however, has been denied by Taiwanese companies like Advanced Semiconductor Engineering (ASE) and other companies that come under Foxconn Group. The companies have told Apple that they will not be able to accept component orders without reasonable profits this time around.

Apple has been increasingly shifting to Chinese companies for its supply chain, and it wanted to leverage this advantage to get Taiwanese companies to lower their component prices. However, there is still a huge difference in quality between Chinese and Taiwanese suppliers, so it does not make sense for Taiwanese companies to lower their quotes.


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