Apple Forced to Lease iPhone 8 Production Equipment to Suppliers

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Amid reports of ongoing production struggles and difficulties acquiring smartphone parts, Apple has opted to take matters into its own hands to ensure that key components are manufactured in time for the iPhone 8’s release. The company has purchased equipment to produce rigid flexible printed circuit boards (RF PCBs), which it plans to lease to suppliers, The Korea Herald reports.

Apple was forced to purchase the equipment, at a cost of “tens of millions of dollars”, after one of its Taiwanese manufacturers backed out of a deal to produce RF PCBs for the iPhone 8 at the last minute.

“One of the three suppliers recently decided to back out,” a source told The Korea Herald, noting that the manufacturer was based in Taiwan. “To fill the loss, Apple is supporting the other two suppliers, both Korean, to beef up production”, the source continued.

Korea-based Youngpoong Electronics and Interflex are the two companies expected to step in to meet demand, and both will likely lease the additional equipment from Apple. Apple, which doesn’t own its own RF PCB production plant, is expected to order 100 million units this year and is reportedly searching for a third supplier in Korea.

RF PCBs are an integral component that connects chips to various iPhone parts like the camera, touch screen panel, and display. As its name suggests, the RF PCB combines both rigid and flexible PCBs into a single board to conserve space– an important consideration given the competitive pressure companies face to cram more features and capabilities into a single smartphone. They are also considerably more difficult and expensive to make, which may explain the Taiwanese manufacturer’s decision to withdraw.

This isn’t the only component Apple has encountered difficulty with. Earlier this year, reports surfaced in the Chinese-language Economic Daily News that suppliers were struggling to integrate the 3D sensing front camera system with the display lamination process. Apple has also reportedly faced technical issues with the software undergirding highly-touted iPhone 8 features like wireless charging.

These issues have led analysts to suggest that the release of the iPhone 8 may be delayed beyond the usual September timeframe. Earlier this year in April, KGI Securities analyst Ming-Chi Kuo published a report noting that Apple may simply go ahead and debut the tenth-anniversary iPhone in September along with the iPhone 7s and 7s Plus, albeit with a severely limited supply until later in the quarter.

[The information provided in this article has NOT been confirmed by Apple and may be speculation. Provided details may not be factual. Take all rumors, tech or otherwise, with a grain of salt.]

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