Apple has released its supply chain list for the 2023 fiscal year, with notable changes compared to the 2022 list. According to a report from CNA, Major IC substrate manufacturer Nan Ya PCB has returned to Apple’s supply chain list, while Nanya Technology, Lotes, Novatek are no longer included. TSMC, Foxconn, Advanced Semiconductor Engineering (ASE), Pegatron, Compal, Wistron, and YAGEO remain part of Apple’s supply chain.

Apple’s 2023 fiscal year supply chain list covers approximately 98% of the materials, manufacturing, and assembly related to Apple products globally.

Compared to the 2022 supply chain list, for Foxconn, the updated list shows manufacturing locations for Apple products in Guangdong, Henan, Jiangsu, Shaanxi, Sichuan, and Zhejiang provinces in China, with the addition of Jiangxi while Hubei continues to be excluded. In other global regions, locations in Amazonas and Sao Paulo in Brazil, as well as California in the United States, are not included in the current list. However, locations in Tamil Nadu, India, and Bac Giang province, Vietnam, remain on the list.

For ASE, related locations include Jiangsu and Shanghai in China, Yamagata Prefecture in Japan, Taiwan, and Hai Phong City in Vietnam, with Gyeonggi-do in South Korea and Singapore continuing to be excluded.

Notably, companies including FPGA designer Lattice Semiconductor’s facility in Taiwan, Nanya’s facilities in Jiangsu and Taiwan, Lotes Terminal’s facility in Guangdong, Novatek Microelectronics and Taiwanese company Triotek Technology Incorporated are no longer parts of Apple’s supply chain for the fiscal year 2023.

On the other hand, major IC substrate manufacturer Nan Ya PCB, with facilities in Jiangsu, China, and Taiwan, has returned to Apple’s supply chain list. Golden Arrow Printing Company, with locations in Jiangsu, China, and Henan Province, Vietnam, is a new addition to Apple’s supply chain list.

Regarding Taiwanese companies that were first included in Apple’s supply chain list in 2022, including Platinum Optics Technology Incorporated, Primax Electronics Limited with locations in Guangdong, Radiant Opto-Electronics Corporation with locations in Guangdong and Jiangsu, Trinseo in Taiwan, and Winbond Electronics Corporation, these companies remain on Apple’s supply chain list for the 2023 fiscal year.

Furthermore, major Taiwanese companies such as TSMC, Catcher, Foxlink, Compal, Compeq, Delta Electronics, Largan Precision, Lite-On Technology Corporation, Pegatron, Shin Zu Shing, TXC Corporation, Unimicron Technology Corporation, Unitech, Wistron, and YAGEO continue to be included in Apple’s supply chain list.

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(Photo credit: Apple)

Following Apple’s cancellation of the Micro LED watch project, the associated supply chain has been further impacted. According to a report from TechNews citing MicroLED-Info, the latest one is KLA Corporation, which has announced a complete exit from the flat panel display (FPD) equipment business.

KLA recently announced its complete withdrawal from the FPD market. The company, which acquired Israeli automated optical inspection (AOI) system supplier Orbotech for USD 3.4 billion, had entered the Micro LED market opportunistically through this acquisition, as Orbotech is a developer of inspection equipment for the semiconductor and display industries.

Due to slowdowns in investment and demand in the consumer electronics market, Orbotech’s performance has been lackluster in recent quarters, with the entire division accounting for only about 3% of KLA’s revenue, totaling USD 283 million in 2023, a decline of 48%. As per the same report, it’s believed that KLA’s decision to shut down this division is linked to the cancellation of a major project with a key customer, likely Apple.

As FPD is one of Orbotech’s main divisions, with KLA announcing its withdrawal from the FPD market, more than 100 employees from this division will face layoffs. KLA stated that exiting the FPD equipment business will not impact the company’s revenue expectations for this quarter, which are projected to be USD 2.3 billion with a variance of plus or minus USD 12.5 million.

Apple’s decision in March to cancel the Micro LED watch project sent shockwaves through the display industry and Micro LED developers.

German LED giant Osram is still considering its next steps, with expected losses of USD 650-900 million; electronic assembly solutions provider Kulicke & Soffa also announced losses of USD 110-130 million due to the cancellation of its collaboration with Apple. Additionally, LG Display’s Micro LED development team within the Strategic Customer (SC) department has started downsizing.

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(Photo credit: Apple)

Following the announcements of AI PC processor chips by NVIDIA and Intel, AMD has also entered the fray by unveiling the Ryzen Pro 8040 and Ryzen Pro 8000 series chips. According to a report from Commercial Times, they will be manufactured by TSMC and are expected to be released in the second half of the year.

On April 16th, AMD announced that the Ryzen Pro 8040 series chip, designed for laptops, and the Ryzen Pro 8000 series chip, designed for desktops, are the most advanced commercial PC chips ever created. These chips will be manufactured using 4-nanometer technology. It is expected that new AI PCs from HP and Lenovo, starting in the second half of this year, will incorporate these two major chip series.

“AI PC” are laptops and desktops capable of directly running real-time language translation and other AI applications locally, as opposed to most PC devices on the market that rely on cloud platforms for AI computations.

Intel previously announced the Core Ultra series chips designed specifically for AI PCs last year and claimed that the first batch of over 230 AI PCs globally will feature this series of chips. Collaborating partners include major PC manufacturers such as Acer, ASUS, Dell, HP, and Lenovo. Gelsinger once expressed at a New York launch event in 2023 that they anticipate the AI PC to be the standout performer in the coming year.

NVIDIA also unveiled a new generation of AI chips in January of this year, claiming they can execute AI applications directly on PC. Collaborating partners include Acer, Dell, and Lenovo.

Similarly targeting the AI PC market, AMD previously announced the Ryzen 8000G series chips designed specifically for desktops in January. Previously, during an interview with Chinese media Sina, Lisa Su, CEO of AMD, indicated that AI-powered PCs will play a crucial role in driving the growth of the PC market this year.

As NVIDIA, Intel, and AMD vie for opportunities in the AI market, TSMC, which possesses the world’s most advanced chip manufacturing technology, emerges as the primary beneficiary. TSMC currently manufactures AI chips for NVIDIA using a 3-nanometer process and is expected to begin mass production of the next-generation 2-nanometer process starting from next year.

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(Photo credit: AMD)

Apple currently uses TSMC’s 3-nanometer process for multiple chipsets. According to a report from wccftech, the iPhone 17 chipset will not adopt the 2-nanometer process. Instead, the A19 Pro chip, expected in 2025, is reportedly maintaining the 3-nanometer technology.

The same report suggests that the Apple A19 Pro chip is considering TSMC’s N3P process and may be featured in the iPhone 17 Pro and iPhone 17 Pro Max. TSMC aims to ramp up its 3-nanometer wafer capacity to 100,000 units by the end of 2024.

TSMC began trial production of 2-nanometer chips as early as June 2023. However, Apple’s A18 Pro chip for the iPhone 16 Pro and iPhone 16 Pro Max might use the N3E process. As for next year’s iPhone 17, its A19 Pro chip is likely to adopt TSMC’s N3P technology.

As per MoneyDJ’s report, it is currently expected that Apple’s iPhone 18 series, slated for release in 2026, will feature the first-ever 2-nanometer chip. Besides Apple, other 2-nanometer customers include Intel, with interest also anticipated from AMD, NVIDIA, and MediaTek. Looking at the process roadmap, this year’s iPhone 16 will use N3E, while next year’s model will adopt N3P. Thus, the first consumer product leveraging TSMC’s 2nm process is anticipated to launch in 2026.

Meanwhile, Apple is said to be striving to stay ahead of competitors and exploring alternative packaging technologies like 3DFabric with its foundry partner. A rumor from the account Yeux1122 has suggested that Apple is already delving into SoIC (Small Outline Integrated Circuit) packaging.

In a bid to reduce dependence on China, Apple significantly expanded its production volume in India, doubling iPhone production last year. Foxconn, which holds the largest share in iPhone assembly, accounted for a substantial 67% of this increased production.

Bloomberg reported on April 10th that Apple’s iPhone production value in India reached USD 14 billion over the last fiscal year, doubling from the previous year’s USD 7 billion. Sources cited by the same report have revealed that approximately 1 in 7 iPhones, or up to 14% of total production, are now manufactured in India. This expansion in Indian production signals Apple’s accelerated efforts to reduce reliance on China amid heightened geopolitical tensions.

Per the sources cited by the same report, nearly 67% of iPhones produced in India last year were assembled by Taiwan’s Foxconn, while Pegatron accounted for about 17%. The remaining share was manufactured at a plant in Karnataka state by Wistron, which sold the facility to Tata Group in 2023.

As per a Reuters report on April 8, contract manufacturer Pegatron was said to be in talks to sell its sole iPhone assembly plant located in Chennai to Tata Group, and discussions were in advanced stages. However, regarding this matter, Pegatron claimed that this report was speculative and lacked evidence, declining to comment further.

Chennai, the capital of Tamil Nadu in India, stands as the largest industrial and commercial hub in South India. Pegatron’s sole factory in India is located here, employing approximately 10,000 workers and producing around 5 million iPhones annually.

Among the four iPhone 15 series models, only certain models like iPhone15 and iPhone15 plus are produced by Tata Group in India.

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(Photo credit: Foxconn)