Lyra Martin Tech 08.07.2022 21:Aug PM EDT

Apple Suppliers Allegedly Told Not to Include 'Made in Taiwan' Labels for Products Shipped to China

After House Speaker Nancy Pelosi's recent trip to Taipei, it is said that Apple advised Taiwanese suppliers to ensure that deliveries to China comply with long-standing labeling requirements to avoid getting banned or rejected.

Apple Reportedly Told Taiwanese providers to Label China Shipments Properly

Following House Speaker Nancy Pelosi's recent trip to Taipei, Apple is said to have instructed Taiwanese suppliers to make sure that shipments to China adhere to a long-standing labeling requirement. The corporation reportedly recently advised manufacturers on the island that components going to the mainland must declare "Chinese Taipei" or "Taiwan, China" as their source.

That is consistent with China's long-standing policy, which it only started implementing after strained relations with the US arose during Pelosi's visit last week. A cargo marked "Made in Taiwan" may be delayed or even rejected by authorities under this regulation. Labeling rules are unique to the self-governing island. The location of origin for shipments must be either "Taiwan" or "The Republic of China."

The IT behemoth and several other American businesses have tangled ties to China. If the allegation is true, it wouldn't be the first time Apple tried to appease the Chinese Communist Party. In the midst of the city's pro-democracy demonstrations in 2019, the business disabled the Taiwan flag emoji from iOS in Hong Kong.

Apple could have believed that, in this case, it had little alternative but to abide by China's regulations regarding exports from Taiwan. Tim Cook said in April that chip shortages had severely hurt the company's iPad business. Any more delays brought on by a customs disagreement before the release of the iPhone 14 later this year would be devastating for Apple.

A Taiwanese Apple Supplier is Fighting a Foreign Investor Over Its Billion Cash Hoard

In a case that foreshadows growing shareholder activism in the region, a Taiwan-based Apple supplier is suing a foreign investor over its multibillion-dollar cash hoard.

Argyle Street Management, a Hong Kong-based investment company, has reportedly pushed Catcher Technology, which makes electronic casings for Apple iPhones built in China, to enhance corporate governance and return part of its $4.2 billion in net cash to shareholders.

Along with Franklin Templeton, Singapore's GIC, and Cathay Life Insurance, Argyle is one of a few of Catcher's overseas institutional shareholders and owns around 1% of the company's shares. One of the persons stated that it spoke with Catcher executives about its worries during a meeting in Taiwan.

Argyle has charged the management of Catcher with hoarding money and utilizing it to support an excessive executive structure. The company, which has a $4 billion market value on Taiwan's stock exchange, is under the hands of three members of the Hung family.

In 2020, Catcher sold two iPhone case units from its Chinese branch to Lens Technology for $1.43bn. Following the China-US trade war, Chinese firms sought new ways to enter Apple's supply chain.

Argyle maintains that, notwithstanding the sale, Catcher has paid a fair dividend of NT$10-NT$12 (.33$ - .40$) per share for the previous five years, totaling NT$42.95B ($1.43 billion), and will maintain that level for the next three years.

The Hung family, which includes the company's chairman Allen Hung, owns around 15% of the company's shares, while foreign institutions possess about 43%.

Catcher is expanding into automotive and medical technology. Taiwanese prosecutors charged 14 people, including Catcher R&D team members, with stealing commercial secrets. Catcher said it "cooperates and follows legal procedures and judgments."