BYD's Side Hustle? Assembling iPads for Apple

While Apple products boast "Assembled in China" labels, the identity of the manufacturers often remains a mystery. One surprising contributor, according to the Wall Street Journal, is BYD, China's leading electric-vehicle maker.

BYD, a major competitor to Tesla in the EV market, also operates a substantial electronics manufacturing business. Industry executives and analysts cited by the WSJ reveal that BYD assembles over 30% of Apple's iPads, employing approximately 100,000 workers dedicated to Apple's supply chain.

BYD's dual role aligns with its strategy of leveraging its expertise in precision manufacturing at low costs. The company employs over 10,000 engineers for its Apple-related work, highlighting the significant investment in this partnership.

Apple's increasing reliance on BYD and Luxshare, another major Chinese assembler, underscores the challenges of reducing reliance on Chinese manufacturing. This is particularly relevant given the potential for increased restrictions on Chinese imports under the second Trump administration.

Apple CEO Tim Cook recently acknowledged the crucial role of Chinese suppliers, stating during a visit to Beijing that, "We could not do what we do without them."

The convergence of automotive and phone technologies in China is creating unique business opportunities. BYD, whose name stands for "Build Your Dreams," supplies components and provides contract manufacturing for both industries. The company works with other major technology firms such as Xiaomi and Huawei, further showcasing its diversified capabilities.

BYD's partnership with Apple extends beyond iPad assembly. Industry executives and analysts suggest that BYD is playing an increasingly significant role in supplying iPhone components, such as the titanium frames for the latest iPhone Pro models. The company has also expanded its operations globally, acquiring facilities in China from US-based Apple supplier Jabil.

BYD's recent financial performance highlights its success. In the third quarter of 2024, BYD's revenue surpassed Tesla's for the first time, driven in part by its contract manufacturing arm, BYD Electronic, which generated approximately $6 billion in revenue during that period. This success is partly attributed to BYD's ability to develop advanced manufacturing capabilities, such as its robotic drillers capable of intricate work on delicate materials.

BYD's relationship with Apple began around 2009, starting with component processing and gradually expanding to include assembly services. The company's 2019 annual report hinted at a significant breakthrough in its business with a major North American client, a reference widely understood within the industry to be Apple and its iPad production. Today, BYD Electronic handles sensitive components like the titanium frames for Apple's latest iPhone models.

BYD's future plans include developing AI-powered robots for factories in collaboration with Nvidia. The company's diversified approach reflects its founder's philosophy of exploring various market opportunities and focusing on areas that show strong potential for growth.