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Apple Reportedly Leasing Equipment to Suppliers to Meet iPhone 8 Production Demands

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Apple Reportedly Leasing Equipment to Suppliers to Meet iPhone 8 Production Demands

Apple has puzzled industry watchers by investing tens of millions of dollars in production equipment for iPhone 8’s rigid flexible printed circuit board, which connects chips with parts such as the display, camera and so forth, ET News reported Friday.



The report also states that the purchase was worth “tens of millions of dollars,” and, if it did happen, would certainly be out of the norm for Apple. The company does not own its own production plants, so needing to supply equipment it has purchased on its own, and then lease to a company, isn’t standard operating procedure for the company by any means. The reason behind the move is apparently one supplier backing out of its agreed-to duties in the process.
 “According to industry sources on July 13, Apple is leasing the equipment to suppliers to make sure it can get the parts it needs. The reports come amid rumors that the new phone launch may be delayed as it is struggling to secure key parts, such as chips and OLED panels.“One of the three suppliers recently decided to back out,” a source told ET News on condition of anonymity, saying that the supplier is a Taiwanese manufacturer.”
Sources speculate the supplier likely backed out due to low profitability and Apple’s exacting standards when it comes to production quality. The iPhone maker is expected to order a hundred million units of the rigid flexible printed circuit board for iPhone 8.

“To fill the loss, Apple is supporting the other two suppliers to beef up production,” said the source. Rigid flexible printed circuit boards are much more difficult to build than the conventional ones.

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