Munster says Apple is entering a transition phase to reduce reliance on China – Apple (NASDAQ:AAPL) | Techno Glob


Apple Inc. AAPL is entering a transition of reducing its dependence on China that could take up to a decade, said Gene Munstermanaging partner at Wolf Ventures.

“If any company can successfully diversify its supply chain without wasting time, it’s Apple,” Munster wrote in a note on Wolf’s website.

He noted that Apple seems to recognize the geopolitical risks inherent in the supply chain and has been slowly shifting production out of China.

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Income: According to his estimate, in 2021, between 52 and 55 percent of Apple’s overall revenue was made in China, compared to 60 to 62 percent in 2020.

“We expect this number to show a decline in the 45-50% range in 2022. Notably, of the 150 new manufacturing sites added in 2021, 79% would be based outside mainland China,” said Munster.

This includes expansion into the United States, Taiwan, Singapore, Vietnam, Malaysia and South Korea, he said.

“While these are modest supply chain changes, we view this as a rapid pace given the scale of revenue from China-based manufacturing: ~$160 billion for the fiscal year. 21,” Munster said.

Munster also pointed out that as a percentage of locations, installations in China represent 35% of the total in 2021, compared to 39% in 2020. For comparison, the number of US-based locations has increased from 9% to 11%. during the same period, he added.

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