Decoupling is everywhere. In the past week or so, we’ve seen multiple announcements on this front, including Apple’s move to diversify production away from China’s “iPhone city”, a Foxconn factory town within Zhengzhou that once made 85 per cent of the company’s Pro line of phones. Then there was TSMC’s tripling of its investment in US domestic chipmaking, Brussels’ announcement that it would offer its own subsidies to speed up local production of clean technology and the spike in Indian stocks as multinational investors looked for cheap new production sites — anywhere but China.
The reasons for these shifts ranged from anti-government protests and factory disruptions in China, to national security and domestic labour concerns, to the cost of fuel or the emissions from a long transport route. But the bottom line is that the diversification, regionalisation and localisation of global supply chains has only just begun, and will probably broaden and deepen in the coming years. This is not only because lawmakers are increasingly incentivising or insisting on it, but also because there is a burgeoning group of companies providing the services and data to make it possible.
From risk consultancies to big rating agencies, law firms to investment houses, and any number of start-ups designed to help companies map or even recreate alternative supply chains, everyone wants a piece of the decoupling pie.