Apple’s AirPods production in India has hit a hurdle following China’s decision to restrict the export of rare earth metals earlier this year. The manufacturing of AirPods began in India for the first time earlier this year, making it only the second Apple product after the iPhone to be locally produced. However, recent export restrictions from China have created supply issues that are affecting production.
According to a report, the Foxconn Interconnect Technology facility in Telangana is currently facing a shortage of dysprosium, a rare earth metal essential for producing high-performance magnets used in AirPods. Along with neodymium, these metals are critical for the audio drivers inside the earbuds.
Since China is a major supplier of both dysprosium and neodymium, its move to restrict exports has put pressure on Apple’s local manufacturing efforts in India. An anonymous source stated, “The issue continues for the industry and Apple in India.”
Foxconn, Apple’s key manufacturing partner in the country, has reportedly raised the issue with the Telangana government, the Ministry of Electronics and Information Technology, the Department for Promotion of Industry and Internal Trade, and the Prime Minister’s Office. The way forward now depends on how both countries navigate the diplomatic situation.
Despite the supply disruption, the AirPods production has not completely stopped. Apple and Foxconn had reportedly anticipated potential challenges and made some preparations in advance to manage the situation. Although the supply chain is under strain, operations are still ongoing at the Telangana plant.
Meanwhile, India is also dealing with labour-related challenges. Recently, over 300 Chinese engineers and technicians working at Foxconn’s India facilities were removed, affecting the company’s staffing and possibly delaying expansion plans. The remaining workforce is mainly composed of Taiwanese personnel.
The combination of supply shortages and workforce shifts may benefit Apple’s China-based suppliers. The report suggests that manufacturers like Luxshare and Goertek, who also produce AirPods for Apple in China, could gain from the disruptions in India.
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