Tesla, Apple Power Component Supplier Slashes China Workforce By About Half

Delta Electronics Inc., a producer of power components for Tesla Inc. TSLA and Apple Inc. AAPL, has cut its workforce in China by about half, the Financial Times reported Thursday.

What Happened: Yancey Hai, Delta’s chairman, told Financial Times in an interview that the company’s target is to cut its direct labor force in China by 90 percent.

Delta is a Taiwanese electronics company that manufactures power components such as cooling fans for notebook computers, solar inverters and motors for electric cars.

In 2019, Delta relocated the production of telecom power equipment to Thailand and Taiwan after the U.S. imposed a 25% tax on such goods made in China as part of the trade war, according to FT.  

The company is now reportedly building four large factories in India to make photovoltaic inverters, industrial automation equipment, and information technology and communications gear.

Why It Matters: The fallout from the U.S.-China trade war and soaring production costs in China have forced Delta and other electronic companies with strong manufacturing bases in China to relocate production to other countries in South-east Asia and India.

Apple supplier Pegatron Corp. said in January that it planned to invest $150 million to set up an iPhone production facility in India. Apple had put the Taiwanese company on probation over labor violations in mainland China last November.

See Also: Apple Looks To Make iPads in India This Year, In A Shift Away From China: Report

Price Action: Apple shares closed almost 3.4% lower on Thursday at $120.53, while Tesla shares closed 6.9% lower at $653.16 and further declined 0.3% in the after-hours session.