Apple has reportedly suspended production at one of its iPhone manufacturing plants in China as the result of the use of unauthorized components.
The story concerns a Wistron plant in Kunshan, China, where the iPhone 8 Plus is manufactured. Production has allegedly been suspended for two weeks, although Wistron insists that this is not true and that, “operations remain completely normal.”
While Wistron assures everyone that relations with Apple remain completely normal, however, the report has caused Wistron’s shares to drop by more than 5 percent on the Taiwan Stock Exchange.
The report containing the original accusation suggests that Wistron has penalized several mid and high-level executives working for the company, hoping to win back Apple’s trust.
In overall terms, Wistron is still a bit player in Apple’s manufacturing supply chain. When it comes to the iPhone 8 Plus, for example, it handles just a small percentage of the models produced, while Foxconn handles 80 percent.
Nonetheless, Wistron is a growing player in Apple’s ecosystem. Last year, it started producing iPhone SE models in India at a factory in Bangalore. These handsets, targeted for the local market, represent an important step for Apple as it tries to expand its market in India. If the report is true about iPhone production being temporarily stopped one of Wistron’s factories, it’s no wonder investors would be worried.