In April 2025, China imposed strict export controls on rare-earth elements like dysprosium and terbium, crucial for manufacturing NdFeB magnets used in haptic motors, speakers, and microphones in AirPods and other audio devices
Foxconn, which began Apple AirPods production in Hyderabad in early 2025 for exports, has now faced component shortages due to disrupted magnet supplies, slowing ramp-up timelines at its Indian plant.
The Broader Electronics Supply Chain Strain
India’s audio device industry is particularly vulnerable: the Electronics Industries Association of India (ELCINA) warns that over 5,000–6,000 direct jobs and 15,000 indirect roles may be jeopardized due to inability to source NdFeB magnets—which also impacts TV, smartphone, and speaker manufacturing
Foxconn’s Hyderabad AirPods facility relies on imported magnet subcomponents. As Chinese licensing delays grow, assembly processes and export schedules face continued pressure.
Impact on Foxconn’s AirPods Unit
- Production slowdowns in India: Magnet shortages could delay output and export shipments from Hyderabad.
- Potential delays in new model launches: AirPods 4 and higher variants may struggle to meet global timelines if component access remains constrained.
- Cost pressures rise: Alternatives such as ferrite magnets degrade performance—impacting tight, advanced designs in audio devices
Industry experts note that while smartphones use fewer rare earth magnets per unit, the sheer scale of mass production means any disruption has amplified consequences across millions of devices
Apple’s Strategic Response
In response to global supply shocks, Apple recently finalized a $500 million deal with MP Materials to secure domestic production of rare-earth magnets in the U.S., supported by recycling and non-Chinese sourcing, with output expected by 2027 Moneycontrol
However, this move addresses long-term resilience. In the short term, India’s AirPods operations remain dependent on imports subject to China’s export licensing delays.
Key Risks & Next Steps
- Short-term disruptions: Raw-material shortages may force increased reliance on finished imports or lower-performance substitutes.
- Economic stakes: Rising input costs could raise prices or delay wider production scale-up across India’s electronics ecosystem.
- Urgent diversification: Industry calls intensify for government incentives to develop domestic magnet refining and rare earth recycling facilities
Several experts emphasize that unless India develops its own rare earth processing capabilities, external bottlenecks will remain a recurring impediment.
📊 Summary Table
| Issue | Impact |
|---|---|
| China export controls | Limits supply of NdFeB magnets |
| Foxconn AirPods (Hyderabad) | Delayed assembly and export ramp-up |
| Indian audio manufacturing | 5,000–6,000 direct jobs at risk |
| Component substitutes | Ferrite magnets compromise device quality |
| Apple’s mitigation | $500M US rare earth deal—production begins 2027 |
Final Word
Foxconn’s ambitious shift to manufacture AirPods in India for export is now facing reality checks—as rare earth supply disruptions hobble component access. The crisis underlines systemic vulnerabilities in global supply chains and reinforces urgency around diversifying sourcing through recycling, domestic mining, and policy-backed infrastructure.
