According to persons with knowledge of the situation, Foxconn‘s Telangana facility has been unable to produce Apple AirPods because of a dysprosium scarcity brought on by China’s crackdown on the export of rare earth metals.
A little over forty-five kilometres from Hyderabad lies the Foxconn Interconnect Technology (FIT) facility at Kongara Kalan. FIT is a major subsidiary of Hon Hai Technology Group (Foxconn), a multinational electronics contract manufacturer based in Taiwan that is listed on the Hong Kong Stock Exchange.
According to the Apple vendor, there has been no interruption in production. In April of last year, Apple started producing AirPods at the India facility as part of a larger plan to diversify production away from China. Neodymium, dysprosium, and other rare earth metals are present in the earphones. China and other countries mine neodymium, which is used as a magnet.
What Caused the Rare Earth Shortage at Foxconn?
According to one of the individuals quoted in a news report, Foxconn alerted the Telangana government about the supply problem. According to various media reports, the Telangana government then brought up the issue with the Department for Promotion of Industry and Internal Trade (DPIIT).
The individual stated that Foxconn has requested assistance from the state government in order to have the end-user certificate (EUC) verified and attested by central ministries. The EUC confirms the intended purpose and recipient of products, particularly those that could be abused or diverted.
Another stated, “As part of the process, Foxconn received the end-user certificate from the Chinese embassy and the Ministry of External Affairs.” Following that, Foxconn’s supplier applied to the Chinese authorities for approval of exports of dysprosium. However, the (Chinese) government has not yet approved it; thus, it is still waiting.
The provider will export the rare earth metal after that is finished. Apple didn’t answer any questions. “There is no disruption to production,” Foxconn stated, adding that it “has no comment on the issue.”
How the Supply Chain Bottleneck is Affecting Apple AirPods Production?
Foxconn and Tata Electronics are two of Apple’s main suppliers in India. Apple’s largest contract manufacturer worldwide is Foxconn. An industry official stated, “The Foxconn AirPods plant did experience a production slowdown, but it appears to have improved since then.” “The company is currently handling the situation, but the metal supply chain is a little longer.”
The second individual cited previously stated, “The Foxconn logistics team is anticipating approval by the end of this month.” ” The application must be approved within 45 to 50 days of the date of submission. Before they receive the extra material, Foxconn is extending the product cycle by using whatever rare earth metals and dysprosium they currently have on hand.
China’s Export Curbs and Their Global Impact on Electronics
In response to US President Donald Trump’s tariff threats, China put seven types of medium and heavy rare earths—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium-related items—on an export control list early in April.
The India Cellular and Electronics Association (ICEA) advocacy group told the government that the restrictions were causing delays and cost inflation, according to an ET story on July 18. Foxconn reportedly recalled more than 300 Chinese engineers from its iPhone manufacturing facilities in India earlier this month, allegedly at Beijing’s request.
At the time, experts stated that although Taiwanese professionals could potentially replace Chinese engineers, machinery and metals were the main cause for concern. They have stated that it is more difficult to maintain operations when those are curbed.
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