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Apple puts Taiwanese supplier on the naughty step

Apple has taken further action over suppliers that continue to perpetrate workers' rights abuses, according to reports.

Reuters said the iPhone maker has now put Pegatron on probation after finding that the Taiwanese supplier violated Apple's supplier code of conduct by asking student employees to work night shifts or overtime.

According to the report, Apple said Pegatron had wrongly classified student workers and falsified paperwork to disguise the violations, and in some cases also breached the code by allowing students to perform work that was unrelated to their studies.

Get in line: With the iPhone 12 just out of the starting gates, it's not a great time for abuse allegations to resurface in the supply chain. (Source: Apple)
Get in line: With the iPhone 12 just out of the starting gates, it's not a great time for abuse allegations to resurface in the supply chain. (Source: Apple)

Bloomberg said Pegatron confirmed it is working "on the corrective actions and are confident that we will complete it soon." The violations took place at the supplier's Shanghai and Kunshan campuses in eastern China.

Pegatron is one of a few Taiwanese manufacturers, alongside Foxconn, which dominate Apple's iPhone assembly chain.

Luxshare muscling in?

Foxconn is still top dog when it comes to assembling Apple's iPhones, but is also growing ever more wary of a smaller rival from China in the shape of electronics manufacturer Luxshare.

Bloomberg noted that Apple's latest move hands an opening to Luxshare, said to be on the verge of becoming the first mainland company to assemble the iPhone.


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GF Securities analyst Jeff Pu told the news agency that Pegatron's current iPhone business should not be affected.

"However, it is likely that Pegatron will lose some orders for the Apple's new handsets next year to Luxshare, which is poised to become a new iPhone assembler in 2021," Pu said.

Reuters said Apple and its suppliers have been accused of poor labor practices in the past, but noted that the US technology company has been trying to tackle such issues by releasing annual reviews of the iPhone supply chain.

In 2017, Apple and Foxconn said a small number of students were discovered working overtime in one of the latter's Chinese factories.

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— Anne Morris, contributing editor, special to Light Reading

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