The latest research shows that Apple suppliers, including iPhone maker Foxconn, have invested US$16 billion since 2018 to move production capacity out of China and reduce their dependence on China.

Apple Inc. and most technology companies have struggled in recent years to wean themselves off China. In addition to ongoing tensions between the United States and China, lockdowns and power supply issues during the COVID-19 epidemic have also caused major delays in iPhone production.

According to the latest research from investment bank TD Cowen, Apple’s losses due to China are considerable.

“In the four years since the outbreak began, we estimate that Apple’s revenue has been impacted by more than $30 billion,” the report said.

TD Cowen said this was due to a lack of parts supply, labor resources, and government-imposed movement restrictions, resulting in undersupply in the market.

TD Cowen analysts believe that due to the impact on the production chain, Apple and its 188 major suppliers are investing in the hope of withdrawing production capacity from China as soon as possible.

The report believes that China’s production environment may continue to be subject to disruption risks. “We believe these risks are persistent and unforeseen environmental disasters may also be cited as a significant factor to monitor,” the analysts wrote.

“We believe current geographic and labor supply diversification can effectively reduce the impact of future production disruptions, which at peak times could reduce Apple’s quarterly revenue by $4 billion to $8 billion,” the analysts wrote.

TD Cowen estimates that Apple suppliers have spent about “$16 billion diversifying production assets from China to India, Mexico, the United States and Vietnam” since 2018.

The report believes that although the transfer of production capacity will bring higher costs in the short term, once production capacity outside China forms a scale, “in the long run, product costs will benefit.”

However, TD Cowen analysts pointed out that although India’s Tata Electronics has the potential to become an iPhone exporter in the future, iPhone production is still concentrated in China.

India is quickly becoming the largest consumer of iPhones. This kind of localized production not only reduces distribution and logistics costs, but also reduces tariffs and improves the purchasing power of local consumers.

However, TD Cowen believes that the current production capacity of Indian factories can support an annual production capacity of about 25 million units.

In addition to supporting local demand for approximately 10 million units, this can also share 20% of the approximately 70 million annual iPhone demand in the United States.

The report stated that, in contrast, Mac and iPad production capacity in Southeast Asia has made good progress.

TD Cowen said that field investigation of the supply chain showed that Vietnam has developed into a major computer production center in recent years and has produced MacBooks, iPads and Apple Watches locally.

“We estimate that Vietnam’s production capacity can support approximately 40% of US Mac/iPad annual demand.” The report pointed out that this is a good progress, but it is still necessary to continue to disperse production capacity to non-Chinese suppliers to meet US consumer demand .