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Apple Inc. reportedly cut off its ties with OFilm Group Co., a Chinese company that makes touch screens, video head modules, fingerprint identification modules, and other products. The American tech giant was said to have ditched the said company due to its alleged link to the Xinjiang labor.
OFilm Group confirms receiving a contract termination notice
As per Reuters, OFilm, which was one of Apple’s main suppliers for its camera modules that are used on iPhones, informed its investors about receiving a notification from a “particular overseas client,” saying it would like to terminate their business relations.
“The impact of this specific customer order change on the company’s operations and performance is still under evaluation, and there is considerable uncertainty,” the company wrote in a statement.
While the company did not directly name Apple as the “overseas client” who sent the notice, information points to the iPhone maker. Now it is believed that Apple and OFilm’s contracts have been canceled for a while now, and this happened after the latter was implicated in the Xinjiang forced labor that violates the human rights of the citizens, including children.
It can be recalled that in July last year, the Trump administration made a list of companies that were prohibited from receiving goods and services from the U.S. The government alleged that the 11 firms in the list have links to the human rights violations in China’s Xinjiang region, and OFilm was one of them.
The Xinjiang labor issue
Bloomberg reported that after Apple was speculated to have terminated its contract with OFilm, its shares dropped by the 10% daily limit, which closed at its lowest since August 2019. Apparently, the withdrawal of its client proved to have a great impact on its revenues.
At any rate, Apple has been clamping down on its suppliers due to labor issues. In 2020, it suspended its contract with Pegatron Corp. due to suspicions of illegal labor practices and abuse.
The company is a contractor that assembles iPhones for Apple. With this, it is no wonder if canceled OFilm after it was embroiled in the Xinjiang labor issue that has been compared to genocide because of the severity.
