As Apple pushes for automation upgrades, supply chain partners face higher costs

Apple’s strategy to diversify its manufacturing base beyond China increasingly relies on its suppliers shouldering the investments required to automate their production lines. This approach marks a shift in how the technology giant manages the balance between cost efficiency and regional expansion.

According to an exclusive DigiTimes Asia report, Apple has long encouraged its vendors to adopt automation technologies, but it plans to accelerate this effort beginning in 2025. The company now views industrial automation not merely as an optional enhancement but as a prerequisite for securing new contracts.

Supply chain insiders tell DigiTimes Asia that, under the updated policy, suppliers must independently fund their own automation equipment rather than depend on Apple to subsidize those upgrades. This mandate spans every major hardware category—iPhone, iPad, Apple Watch, and Mac—signaling a comprehensive commitment to robotic assembly and smart manufacturing.

While the upfront burden on suppliers will increase operating expenses, Apple expects these investments to pay off over time through higher production yields and lower unit costs. Automating repetitive tasks offers the promise of more consistent quality and streamlined workflows once the new systems are fully integrated.

However, the emphasis on machine-driven production means that even as Apple relocates some operations away from China in response to trade tensions, job creation in alternative manufacturing hubs may prove limited. Automation inherently reduces the need for manual labour, counterbalancing any potential gains in local employment.

This development also challenges the narrative promoted by U.S. officials encouraging Apple to onshore production. Last April, Commerce Secretary Howard Lutnick famously envisioned “millions and millions of human beings screwing in little screws to make iPhones,” suggesting that assembly work would return to American factories. The latest report illustrates that regardless of location, automated processes will likely dominate Apple’s manufacturing footprint.

Although Apple has publicly highlighted initiatives to build greener, recycled facilities in support of its domestic manufacturing ambitions, the core driver behind its supply chain realignment appears to be automation rather than a renewed focus on labour-intensive assembly.