Chinese company O’Film Group has been kicked out of Apple’s camera module supply chain, TheElec has learned.
The US Department of Commerce had early in July designated O’Film Group among a list of eleven Chinese companies that it accuses of taking part in human rights violations against the Uighur people.
The exclusion of O’Film from Apple’s supply chain is expected to benefit LG InnoTek and Sharp, a rival camera module suppliers to Cupertino.
O’Film’s modules accounted for around mid-10% of those used by Apple in its smartphones. LG InnoTek’s account for some 50% and Sharp 30%.
The Chinese company will now likely only supply camera modules for legacy iPhones. It won’t be able to supply to newly launched iPhones.
LG InnoTek had supplied the triple camera and time of flight (ToF) module for iPhones 12 Pro and iPhones 12 Pro Max. The company will likely now also supply modules for lesser tier iPhones.
However, it remains to be seen on how much the increased supply will benefit LG InnoTek in terms of profitability.
Apple is planning to outsource the assembly of modules to its contract makers like Foxconn next year.
Prior to this change of plans, camera module companies like LG InnoTek assembled them themselves prior to supplying them. Cupertino’s changes will make these companies lose revenue from assembly fees.
Apple’s changes is similar to that of rival Samsung Electronics, which is also increasingly the number of modules it assembles on its own.
Apple will also look for new camera module suppliers besides LG InnoTek and Sharp for leverage in talks to set unit prices of modules.
The US House of Representatives in September passed the Uyghur Forced Labor Prevention Act by 406 to 3.
