BYD Assigns Over 100,000 Employees Including 10,000 Engineers to Assemble More Than 30% of Apple Tablets
China's largest electric vehicle company BYD, which started as a side business assembling Apple's tablet products, has grown into one of the world's top iPad assemblers, the Wall Street Journal (WSJ) reported on the 1st (local time).
WSJ stated, "BYD has grown to assemble more than 30% of Apple's tablets," adding, "BYD employs about 100,000 workers in Apple's supply chain, known as the 'fruit chain,' including over 10,000 engineers."
Through its affiliate BYD Electronics, which has been engaged in the OEM business for smart devices, BYD partnered with Apple in 2009 in the parts supply chain. Since then, BYD has developed its relationship from processing Apple's metal cases to supplying glass and ceramic components used in iPhones and iPads. Earlier, BYD acquired the China business of Apple supplier Jabil last year for about $2 billion (approximately 3 trillion KRW), and recently, it has been responsible for sensitive Apple operations such as titanium frame parts used in iPhone Pro models.
Contract manufacturing of Apple products is considered an ideal business not only for Apple, which seeks to diversify its supply chain, but also for BYD. It is a type of business where BYD can fully leverage its capability to produce precision devices at low cost. WSJ explained, "Electric vehicles are similar to smartphones on wheels," noting, "Both rely on batteries, chips, and software." Tim Cook, Apple's CEO, who met BYD Chairman Wang Chuanfu in Shanghai last March and praised BYD as a "company that expands the boundaries of possibility," also visited Beijing last month, showing a friendly relationship by saying, "We couldn't do what we do without them."
WSJ analyzed, "Apple, which has abandoned launching its own electric vehicle, benefits from cooperating with BYD by diversifying suppliers away from Foxconn, the Taiwanese assembler that produces the most iPhones and iPads," but also noted, "Apple's increasing dependence on Chinese companies shows how difficult 'de-China' efforts really are."
The honeymoon between Apple and BYD is not without challenges. Donald Trump, the U.S. president-elect who has threatened tariffs on China, announced on the 25th of last month that he would impose an additional 10% tariff on China on top of existing tariffs. If Apple continues its close ties with BYD, it could risk falling out of favor with the next administration.
However, Ivan Lam, an analyst at Counterpoint Research, said, "One of BYD's responsibilities is to help Apple diversify its China-centric manufacturing," adding, "Since BYD already produces Xiaomi smartphones in India, it could increase Apple product production in India if requested by Apple."
Besides Apple, BYD also supplies assembly and electric vehicle technology to Chinese smartphone manufacturers Xiaomi and Huawei, and collaborates with Samsung Electronics by supplying hinge parts for some foldable phones. WSJ reported that BYD's next targeted 'big deal' is a commercial partnership with Nvidia for industrial artificial intelligence (AI) robots. Earlier, Nvidia announced in June that it is collaborating with several manufacturers, including BYD Electronics, to develop humanoid and other industrial robot platform technologies.
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