China Has the Rare Earths, So That’s Where Apple Makes Its iPads

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Why are iPads made in China? Cheap labor is the obvious answer, but labor is such a small part of the iPad’s total cost that this probably isn’t the real reason. A more compelling argument is that China simply has a far more efficient high-tech manufacturing sector than America does these days. It’s China’s “flexibility, diligence and industrial skills” that make it so attractive. This is probably most of the answer, but Elizabeth Chamberlain suggests that China’s near-monopoly on rare earth elements might play a role too:

Cambridge engineering professor Dr. Tim Coombs guesses that there may be lanthanum in the iPad’s lithium-ion polymer battery, as well as “a range of rare earths to produce the different colours” in the display….Electronics glass is often polished with cerium oxide. According to a Congressional Research Service report, worldwide demand for rare earths was 136,100 tons in 2010, 45-percent of which was for magnets, glass, and polishing.

Why is all this rare earth consumption a problem? China currently controls 95-97% of the world’s supply of rare earths and has repeatedly cut export quotas, sending already-high prices skyrocketing.

….Today, an American electronics company can only be exempt from China’s rare earth export quotas by manufacturing within China. So that’s what most companies, including Apple, are doing. The only other solution is for us to stop consuming so much—an option that people rarely find appealing. Not as appealing as a retina display, at least.

Interesting suggestion. More on rare earths here.

(Via Felix Salmon.)

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