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Why this Chinese Apple AirPods maker is vulnerable to supply chain chaos even though it has filed thousands of patents
- Analysts have warned that the Shandong-based company may share the fate of Ofilm, which was also booted off Apple’s supplier list
- Goertek’s current plight has raised fresh questions about China’s move to boost patent applications, particularly when it comes to product quality
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Ben Jiangin Beijing
Goertek, a key AirPods supplier, became a symbol of China’s weakened position in Apple’s supply chain last week when it said that a big overseas client had dumped it for certain orders.
This could not mean anyone else but Apple and investors in Shenzhen dumped Goertek’s stock. Its shares are down 9 per cent in the past five days, although there was a 4.7 per cent bounce back on Tuesday.
Analysts have warned that the Shandong-based company may share the fate of Ofilm, a Chinese manufacturer which was also sideswiped after Apple booted it off its supplier list, laying bare the current vulnerability of ‘made-in-China’ in global supply chains amid rising US-China trade tensions.
Apple has been moving to diversify its supply chain beyond China to countries like India and Vietnam, as Covid-19 lockdowns on the mainland disrupt manufacturing activity and as growing tensions between Beijing and Washington unsettle business in the world’s second-largest economy.
Apple dropped Ofilm as a supplier in March last year after it was added to Washington’s trade blacklist over alleged involvement in a government programme that transferred ethnic minorities from Xinjiang to work at the company’s factories. Neither Apple nor Ofilm have commented on the forced labour allegation.
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