What you need to know
- iPhone camera module supplier Ofilm says it has been dropped by a "particular overseas client".
- A Bloomberg report Wednesday says that supplier is Apple.
- Ofilm faces allegations it was involved in human rights violations against Uighurs in the Xinjiang region.
A new report says that the "particular overseas client" which Ofilm admitted has dropped it as a supplier is in fact Apple.
As reported by Reuters yesterday, Ofilm told investors it had received notification that a "particular overseas client" was going to end its contracts with the firm:
China's OFilm Group Co Ltd, a maker of camera modules, told investors it received a notification from a "particular overseas client" saying it would cut its business ties."The impact of this specific customer order change on the company's operations and performance is still under evaluation, and there is considerable uncertainty," the company wrote in a statement, without naming the customer.
Speculation indicated that it was Apple who had dropped Ofilm, given the company's own admission that the unnamed customer made up 22.51% of its 2019 operating income. That has now seemingly been confirmed by Bloomberg:
Apple Inc. has severed ties with Chinese component supplier Ofilm Group Co. over allegations it's involved in a government program that transfers ethnic minorities from Xinjiang to other parts of the country for work, a person familiar with the matter says. The iPhone maker is thought to have terminated its contracts with Ofilm over the concerns a few months ago, the person said, asking not to be identified discussing a private matter.
The report says it is "unclear" if Apple knows whether allegations against Ofilm are true. It was reported back in December that Ofilm was one of a number of companies in China identified by the US Department of Commerce as being involved in "human rights violations against the Uighur people." As explained by Bloomberg:
China has been accused by the U.S. and other Western governments of detaining more than 1 million Muslim Uyghurs in camps in the far western Xinjiang region and pushing them into work programs. The U.S. government and lawmakers in Canada and the Netherlands have said China's actions constitute genocide. Washington has also banned cotton products from the region, and there have been some calls to boycott next year's Winter Games in Beijing over the issue.
It was reported then that Apple had likely dropped the firm from its supply chain, with Ofilm's latest statement and a report from Bloomberg seemingly confirming the speculation.
