Apple’s suppliers face higher costs as it turns to automation

As Apple moves to diversify its manufacturing operations, it appears to be leaning on suppliers to shoulder the costs of automating their assembly lines. Here are the details.

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In an exclusive report today, DigiTimes Asia says that Apple has been doubling down on industrial automation as it shifts away from China manufacturing.

The report says that while Apple has always incentivized its suppliers to invest in automation, the company “plans to intensify implementation starting in 2025.”

From the report:

“According to supply chain sources, Apple now mandates automation as a precondition for securing orders, requiring suppliers to independently invest in related equipment rather than relying on Apple to fund such upgrades.”

DigiTimes Asia says that this push touches on “all major product lines, including the iPhone, iPad, Apple Watch, and Mac,” and that while suppliers may see increased costs while spinning up their lines, this should be amortized in the long-term, with “yield rates and reduced production expenses.”

In practice, this means that while Apple looks to diversify its supply chain away from China due to Trump’s tariff wars, local workforces in other countries may not reap the benefits, as Apple’s reliance on automation reportedly “aim at receding labor dependency.”

Although Apple’s automation push doesn’t come as a surprise, it does undercut one of the U.S. government’s talking points when it comes to Apple and the pressure to drive it away from China.

Here’s a statement made last April by Commerce Secretary Howard Lutnick, as the tariff war was still heating up:

“The army of millions and millions of human beings screwing in little screws to make iPhones. That kind of thing is going to come to America.”

To be fair, Apple has done its best to appease the U.S. government with flashy announcements of recycled infrastructure plans. Still, today’s report makes it clear that, regardless of where production goes, automation, not labor, will probably drive Apple’s move away from China.

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