Today’s New York Times has an interesting article about the quiet role that Taiwanese companies are playing in development and manufacture of the iPhone:
TAIPEI, Taiwan — Etched into the back of every iPhone are the words “Designed by Apple in California. Assembled in China.” Apple might as well have added “Made in Taiwan.”
With little fanfare, Taiwan companies are playing a big role not only in the production of Apple’s latest device but in a wide array of other communications equipment, including the broadband modems in homes across the United States and the next generation of high-speed wireless gear.
Apple does not discuss which vendors it uses, but news reports in Taiwan said that Hon Hai and Quanta received orders to produce millions of iPhone handsets, reports that those companies declined to confirm. Other manufacturers there were almost certainly involved because they provide components used in advanced phones, industry analysts said.
Taiwan companies also have a hand in making iPods and iMacs, they said, as well as game machines for Sony and Microsoft.
Taiwan’s rise as a communications workhorse is part of a decade-long transformation under way on this Chinese Nationalist-controlled island south of the mainland. Already the world’s biggest producers of computer components, Taiwan companies like Compal Electronics, in addition to Hon Hai and Quanta, have used their expertise to branch out into new markets that use many of the same products.
By harnessing the ability to cut costs, churn out products quickly and work flexibly with customers, the Taiwan companies have become top makers of cellphones, smartphones, broadband modems, wireless routers, global positioning devices, networking equipment and other gear. They, like companies elsewhere, have also made deep inroads into China, where many of their factories are.
“It’s not a surprise that the iPhone would be made here because the food chains for Apple’s notebooks and iPods are already in Taiwan,” said Dominic Grant, a telecommunications analyst at Macquarie in Taipei. “It’s a natural progression.”
Taiwan’s evolution from computer-making giant to telecommunications Goliath has gone largely unnoticed in the United States because companies here make most of their money as made-to-order manufacturers, not sellers of their own brand products. But Taiwan’s industrial makeover has helped its companies remain competitive in a world increasingly dominated by low-cost Chinese assemblers and by Japanese and South Korean companies with strong footholds in high-end components like flash memory chips.