Unrest at Wistron plant could delay India iPhone market expansion, analyst says

AppleInsiderAppleInsider
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in General Discussion
Recent upheaval at a Wistron manufacturing plant in India could delay Apple's production plans in the country, though the situation is unlikely to affect an iPhone 12 ramp, analysts from Piper Sandler claim.

Credit: Andrew O'Hara, AppleInsider
Credit: Andrew O'Hara, AppleInsider


In a note to investors seen by AppleInsider, Piper Sandler analyst Harsh Kumar covered a range of semiconductor news tidbits. Included in a broader view of the chip and handset industry are several stories related specifically to Apple.

For example, Kumar notes that Apple is investigating whether Wistron broke supplier rules following a riot at its facility in Narasapura.

Workers at the plant currently manufacture the iPhone 7 and second-generation iPhone SE, so Kumar notes that any production delays in Narasapura are unlikely to affect the ramp up of the iPhone 12 or iPhone 12 Pro lineup.

However, about $60 million of equipment were destroyed during the upheaval, which was sparked by disagreement over pay rates and working conditions. Kumar notes that further iPhone manufacturing growth in the region could be stalled.

Back in August, Apple was said to be planning to produce specific iPhone 12 models in India by the middle of 2021. In the wake of the recent events there, it isn't clear what will happen to that timeline.

Despite the Wistron trouble in India, the mobile semiconductor industry is likely to benefit from strong and sustained iPhone 12 demand. Kumar highlights a recent Nikkei report indicating that Apple is upping production by 30% year-over-year in 2021.

Taiwan Semiconductor Manufacturing Company Chairman Mark Liu also dismissed rumors of a cutback in 5-nanometer chip orders from Apple. Reports had suggested that the company's 5nm capacity utilization would fall to 80%.

Other analysts point out that the utilization drop is due to seasonality rather than iPhone demand. Kumar agrees, and says that current handset supply shortages could keep chip demand high in what is normally a slow season for foundries.

Intel is also facing another headwind after reports surfaced that Microsoft will follow in Apple's footsteps and begin developing its own ARM-based chipsets.

Comments

  • Reply 1 of 9
    randominternetpersonrandominternetperson Posts: 3,089member
    How could it NOT delay things?
    muthuk_vanalingamfred1
  • Reply 2 of 9
    viclauyycviclauyyc Posts: 849member
    Who need revenge when you have Harsh Karma.  

    I will show myself out
    GeorgeBMac
  • Reply 3 of 9
    Fred_the_HeadFred_the_Head Posts: 5member
    It’s a shame that Apple had no inkling that things were so bad. 
    Dogperson
  • Reply 4 of 9
    maestro64maestro64 Posts: 5,043member
    Fred_the_Head said:
    It’s a shame that Apple had no inkling that things were so bad. 
    Why would they, it's a separate company, do you know how well your grocery store treats its workers? If you don't you should.
  • Reply 5 of 9
    maestro64maestro64 Posts: 5,043member
    viclauyyc said:
    Who need revenge when you have Harsh Karma.  

    I will show myself out
    He should get a bonus for figuring that out.
  • Reply 6 of 9
    maestro64maestro64 Posts: 5,043member
    BTW, it was not Wistron who was not paying, it was the staffing company Wistron contracted to hire workers, Wistron was paying them but they were short changing the workers. This is not unusual in the staffing industry in India. This is why all the article kept referencing the workers were not getting their contracted wage.
  • Reply 7 of 9
    GeorgeBMacGeorgeBMac Posts: 11,421member
    maestro64 said:
    Fred_the_Head said:
    It’s a shame that Apple had no inkling that things were so bad. 
    Why would they, it's a separate company, do you know how well your grocery store treats its workers? If you don't you should.

    False Analogy....
    Every person and every corporation has at least some liability for the contractors they employ.
    danox
  • Reply 8 of 9
    GeorgeBMacGeorgeBMac Posts: 11,421member
    maestro64 said:
    BTW, it was not Wistron who was not paying, it was the staffing company Wistron contracted to hire workers, Wistron was paying them but they were short changing the workers. This is not unusual in the staffing industry in India. This is why all the article kept referencing the workers were not getting their contracted wage.

    True.
    That's a pretty common method of worker abuse:  don't hire the worker, hire an agency who hires the worker.  That way you can impose abusive work conditions on them (and replace them at their first complaint) while the agency short pays them.  Everybody wins -- except the workers.
    danox
  • Reply 9 of 9
    maestro64maestro64 Posts: 5,043member
    GeorgeBMac said:
    maestro64 said:
    Fred_the_Head said:
    It’s a shame that Apple had no inkling that things were so bad. 
    Why would they, it's a separate company, do you know how well your grocery store treats its workers? If you don't you should.

    False Analogy....
    Every person and every corporation has at least some liability for the contractors they employ.
    okay a better analogy, you contract our local repair shop to fix your car do you have some liability for the how they treat their mechanics and provide all the necessary safety equipment.

    Remember contractors in this case do not work for Apple they work for third part company who provides workers to Wistron. Apple is not contracting Wistron to provide workers. Apple has an arms length agreement with Wistron to build product to Apple specs. The only liability Apple would have is if they force Wistron to build a product which put the workers at risk.
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