Historically, China’s supply chain has consistently contributed the largest volume of components in Apple’s iPhones.

According to Apple’s previously disclosed supply chain data, China (including Taiwan Province) unequivocally holds the highest quantity share globally, nearing 50%.

However, despite this significant volume, China’s value share within Apple’s supply chain has traditionally been relatively modest.

This is primarily because some core, high-value components are predominantly supplied by chains from Japan, South Korea, and the United States.

For instance, South Korea supplies OLED screens and memory chips, Japan provides memory chips, and the United States also contributes chips. In contrast, China’s supply chain mainly focuses on casings, connectors, contract manufacturing, and assembly. Given that these areas involve less advanced core technology, the value share naturally remains lower.

Nevertheless, some observers have posited that with the advancement of Chinese manufacturing and the diligent efforts of China’s supply chain, Chinese manufacturers are poised to transition from low-value components to high-value ones.

This prediction has now materialized. In Apple’s most premium and costly iPhone Duo, China’s supply chain has achieved a value share exceeding 40%. Even amid the current surge in memory chip prices, China’s supply chain still maintains the highest value share, ranking first.

According to a teardown analysis of Apple’s 256GB iPhone Duo by a reputable institution, its Bill of Materials (BOM) cost is approximately $1,400. The value distribution of this $1,400 hardware cost across various countries and regions is illustrated in the figure below.

South Korea, due to its provision of memory chips—especially given the current exorbitant price hikes—commands a value share ranging from 20% to 35%. Mainland China follows closely with a share of around 20% to 30%, as numerous hinges and other components for Apple’s foldable screen phones are supplied by Chinese companies. These components are crucial and relatively expensive in the foldable screen ecosystem.

Taiwan, China accounts for approximately 12% to 15% of the value share. After all, the A20 Pro is contract manufactured by TSMC, and assembly is also undertaken by Foxconn. Furthermore, numerous Chinese companies supply casings, lenses, connectors, batteries, and more.

Collectively, the value share of companies from mainland China and Taiwan, China surpasses 40%, securing the top position.

In contrast, the United States holds a mere 8% to 12% value share, while Japan and other regions also contribute only 10% to 15%. Relatively speaking, these figures are significantly lower than China’s supply chain.

This disparity is largely attributed to the high cost of memory chips, which inflates South Korea’s share. Had memory prices not been so steep, China’s supply chain value share would likely be even higher, potentially surpassing mainland Chinese companies and relegating South Korea to a lower position.

Looking ahead, BOE’s OLED screens, along with China’s memory and flash memory chips, are anticipated to penetrate Apple’s foldable screen supply chain. By then, China’s supply chain value share is expected to exceed 50%, solidifying its leading position.

It is evident that China’s supply chain is no longer synonymous with low cost as it once was. It has now mastered core technologies, marking significant progress. Congratulations are indeed in order for China’s supply chain.