Contrasting manufacturing strategies put Samsung, Apple in very different boats as Trump tariffs loom

People walk past an Apple store in the Huangpu district in Shanghai on April 11. [AFP/YONHAP] Differences in Apple and Samsung Electronics' manufacturing strategies may have left the two tech giants on very different footing as the United States threatens sweeping tariffs on China-made goods, exposing Apple's deep reliance on Chinese production while highlighting Samsung's early pivot away from the country. Apple may have narrowly avoided an immediate crisis, but the risk remains as the U.S. government's threat of heavy tariffs looms over the tech giant, which relies on China for more than 80 percent of its iPhone production. Related ArticleApple, Samsung avoid U.S. tariff fallout but concerns over further action loom largeSamsung, Apple smartphones exempt as Trump excludes key tech products from tariffsRivals Apple, Samsung face similar challenges in wake of Trump tariffs Apple launches 'age assurance' tech as U.S. states mull social media laws While smartphones and PCs were recently excluded from the U.S. “reciprocal tariff” list, the decision is seen as more of a reprieve than a permanent solution. Samsung Electronics, which moved its manufacturing base from China to Vietnam between 2018 and 2019, is in a relatively better position. Apple, on the other hand, remains heavily dependent on "Made in China" production. The question is — why has Apple stayed? Reliance on consignment ties up production network The key difference lies in manufacturing strategy — Samsung manufactures its products directly, while Apple focuses on product design and outsources assembly to local Chinese companies like Foxconn and Pegatron. These companies operate massive production facilities in China. Foxconn’s Zhengzhou factory, known as "iPhone City," employs hundreds of thousands of workers and boasts a highly sophisticated production infrastructure. For years, this structure was Apple’s strength. The Chinese production ecosystem, refined over more than two decades, offered precision assembly, rapid mass production, and low labor costs — an ideal system for minimizing expenses and meeting tight deadlines. Workers attend a skills training course at a learning center of Foxconn in Zhengzhou, central China's Henan Province, on Oct. 12, 2024. [XINHUA/YONHAP] From a symbol of efficiency to a hotbed of risk However, as U.S.-China tensions have escalated and geopolitical risks have grown, this once-efficient structure has become a liability. With supply chain diversification emerging as a survival strategy for global companies, Apple’s China-centric production system now poses a strategic risk. Given Apple’s reliance on outsourcing, shifting or modifying production bases is challenging. In contrast, Samsung manufactures its key smartphones in-house. This allowed the company to swiftly close its Huizhou plant in China, which once produced 63 million units a year, and move production to Vietnam. Today, Samsung makes more than half its smartphones at its factories in Bac Ninh and Thai Nguyen in northern Vietnam. Supplier relationships also play a crucial role when relocating production. "Samsung runs its own factories, so it has many suppliers in Korea with strong links,” an IT industry official said. “When moving production overseas, Samsung often brings its key suppliers along. Apple has to go through Foxconn, a Chinese company, which weakens its ties with suppliers and slows down strategic decision-making.” Customers shop iPhones at an Apple store in Chicago, Illinois, on April 14. [AFP/YONHAP] Eyeing Chinese consumers Apple also has to navigate its sensitive relationship with China. Samsung could withdraw from China because its smartphone market share there was negligible. Apple’s situation is different. China accounts for about 20 percent of Apple’s total revenue. Moving its production base out of China could deal a significant blow to the company’s brand image in the country. President Trump’s decision to exclude Apple products from tariffs is interpreted as a message that the U.S. government is giving them time to move iPhone production to the United States. The White House has openly said that Trump "believes Apple can move its production to the United States." However, many experts doubt the feasibility of such a move. "Apple built its supply chain in China not because of cheap labor but because of technology and production capabilities,” Apple CEO Tim Cook said in 2017. The precision assembly skills, parts network and skilled labor found in China are severely lacking in the United States. "What city in America is going to put everything down and build only iPhones?" asked Matthew Moore, a former Apple manufacturing engineer, in an interview with Bloomberg. "Boston is over 500,000 people. The whole city would need to stop everything and start assembling iPhones." Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff. BY YI WOO-LIM [[email protected]]

Contrasting manufacturing strategies put Samsung, Apple in very different boats as Trump tariffs loom Published: 15 Apr. 2025, 12:56 Audio report: written by reporters, read by AI People walk past an Apple store in the Huangpu district in Shanghai on April 11. [AFP/YONHAP] Differences in Apple and Samsung Electronics' manufacturing strategies may have left the two tech giants on very different footing as the United States threatens sweeping tariffs on China-made goods, exposing Apple's deep reliance on Chinese production while highlighting Samsung's early pivot away from the country.

Apple may have narrowly avoided an immediate crisis, but the risk remains as the U.S. government's threat of heavy tariffs looms over the tech giant, which relies on China for more than 80 percent of its iPhone production.

Related Article Apple, Samsung avoid U.S. tariff fallout but concerns over further action loom large Samsung, Apple smartphones exempt as Trump excludes key tech products from tariffs Rivals Apple, Samsung face similar challenges in wake of Trump tariffs Apple launches 'age assurance' tech as U.

S. states mull social media laws While smartphones and PCs were recently excluded from the U.S.

“reciprocal tariff” list, the decision is seen as more of a reprieve than a permanent solution. Samsung Electronics, which moved its manufacturing base from China to Vietnam between 2018 and 2019, is in a relatively better position. Apple, on the other hand, remains heavily dependent on "Made in China" production.

The question is — why has Apple stayed? Reliance on consignment ties up production network The key difference lies in manufacturing strategy — Samsung manufactures its products directly, while Apple focuses on product design and outsources assembly to local Chinese companies like Foxconn and Pegatron. These companies operate massive production facilities in China. Foxconn’s Zhengzhou factory, known as "iPhone City," employs hundreds of thousands of workers and boasts a highly sophisticated production infrastructure.

For years, this structure was Apple’s strength. The Chinese production ecosystem, refined over more than two decades, offered precision assembly, rapid mass production, and low labor costs — an ideal system for minimizing expenses and meeting tight deadlines. Workers attend a skills training course at a learning center of Foxconn in Zhengzhou, central China's Henan Province, on Oct.

12, 2024. [XINHUA/YONHAP] From a symbol of efficiency to a hotbed of risk However, as U.S.

-China tensions have escalated and geopolitical risks have grown, this once-efficient structure has become a liability. With supply chain diversification emerging as a survival strategy for global companies, Apple’s China-centric production system now poses a strategic risk. Given Apple’s reliance on outsourcing, shifting or modifying production bases is challenging.

In contrast, Samsung manufactures its key smartphones in-house. This allowed the company to swiftly close its Huizhou plant in China, which once produced 63 million units a year, and move production to Vietnam. Today, Samsung makes more than half its smartphones at its factories in Bac Ninh and Thai Nguyen in northern Vietnam.

Supplier relationships also play a crucial role when relocating production. "Samsung runs its own factories, so it has many suppliers in Korea with strong links,” an IT industry official said. “When moving production overseas, Samsung often brings its key suppliers along.

Apple has to go through Foxconn, a Chinese company, which weakens its ties with suppliers and slows down strategic decision-making.” Customers shop iPhones at an Apple store in Chicago, Illinois, on April 14. [AFP/YONHAP] Eyeing Chinese consumers Apple also has to navigate its sensitive relationship with China.

Samsung could withdraw from China because its smartphone market share there was negligible. Apple’s situation is different. China accounts for about 20 percent of Apple’s total revenue.

Moving its production base out of China could deal a significant blow to the company’s brand image in the country. President Trump’s decision to exclude Apple products from tariffs is interpreted as a message that the U.S.

government is giving them time to move iPhone production to the United States. The White House has openly said that Trump "believes Apple can move its production to the United States." However, many experts doubt the feasibility of such a move.

"Apple built its supply chain in China not because of cheap labor but because of technology and production capabilities,” Apple CEO Tim Cook said in 2017. The precision assembly skills, parts network and skilled labor found in China are severely lacking in the United States. "What city in America is going to put everything down and build only iPhones?" asked Matthew Moore, a former Apple manufacturing engineer, in an interview with Bloomberg.

"Boston is over 500,000 people. The whole city would need to stop everything and start assembling iPhones." Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

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