iPhone eventSource: Apple

What you need to know

  • A key Apple supplier has been 'blacklisted' by the U.S. Government.
  • O-Film Group was one of 11 companies added to the list.
  • The U.S. Commerce Department added the firm over alleged human rights abuses involving China's Uighur Muslim population.

A key Apple supplier has been blacklisted by the U.S. Commerce Department over alleged human rights abuses involving Uighur Muslims in China.

As Nikkei Asian Review reports:

Washington has blacklisted a key Apple supplier as part of its latest crackdown on Chinese tech companies, a move that is expected to shake up consumer electronics supply chains and hasten the ongoing decoupling of the world's two largest economies.

Camera and touch module supplier O-Film Group was one of 11 Chinese companies added to the U.S. Commerce Department's Entity List on Monday over alleged human rights abuses involving China's Uighur Muslim minority. The Shenzhen-listed O-Film is a rising star in the consumer electronics and automobile supply chains, and supplies a wide range of American companies, including Microsoft, HP, Dell, General Motors and Amazon, as well as Apple. It also counts Samsung Electronics, Huawei Technologies, Oppo and Sony as clients.

As noted the firm supplies not only Apple but Microsoft, Dell, HP, Huawei, Samsung, and Sony.

According to the report, O-Film subsidiary Nanchang was named on the list "in connection with the forced labor of Uighurs and other Muslim minority groups in western China." Companies on the list must apply for special licenses to access U.S. technologies. Two other electronic supply chain companies, Tanyuan Technology, and KTK Group were added to the list.

The report says the move could "significantly impact multinational and U.S. companies' choice of suppliers', perhaps even changing the supply chain landscape long term. O-Film supplies camera and touch components for Apple's iPhone and iPad and is described in the report as a "formidable competitor" to leading suppliers like Foxconn. Tim Cook visited an O-Film factory in December of 2017, praising the company's expertise and culture and reportedly stating Apple would "forge a close collaboration with O-Film in the future."

Apple analyst Jeff Pu stated:

"O-Film has become a crucial camera module supplier for Apple over the years. O-Film could tell Apple, its major customer, that its production lines do not involve forced labor. But the addition to the U.S. trade blacklist could still impact its future engagement with U.S. clients such as Apple and its share of orders in the future."

You can read the full report here.