According to Digitimes, suppliers in Taiwan are beginning to resist demands for ever-greater discounts from Apple. The article says the Cupertino, California-based company has met resistance from makers in Taiwan’s supply chain to lower their quotes for parts and components for the “iPhone 7.”
Digitimes says Apple has asked downstream part and component suppliers, excluding Taiwan Semiconductor Manufacturing Company (TSMC) and Largan Precision, to reduce their quotes for iPhone 7 devices by as much as 20% even though order volumes for new phones are reportedly 30% lower than those placed a year earlier.
However, downstream suppliers, notably Advanced Semiconductor Engineering (ASE) and associated companies under the Foxconn Group, have replied Apple that they couldn’t accept orders without reasonable profits.
With the assembly plant as the focus of the supply chain, upstream activity includes suppliers of raw materials, which are materials not processed. Downstream from the assembly plant are distributors, shipping partners, and point-of-sale stops along the way, such as wholesalers and retailers.