Startup Originals Team
Foxconn’s Telangana facility, a crucial hub for manufacturing Apple AirPods in India, is currently facing significant production challenges. The cause? A severe shortage of rare earth metals, especially dysprosium, an essential element for making key components in AirPods. This issue has not only impacted the plant’s output but underscores global supply chain vulnerabilities and the strategic tensions affecting technology manufacturing.
Why Is Dysprosium So Important?
Dysprosium, along with neodymium, is a heavy rare earth metal critical for the permanent magnets used in AirPods’ tiny speakers and haptic feedback systems. Most of the global supply of these metals comes from China, giving it substantial leverage over downstream tech manufacturing dependent on these resources.
What Triggered the Shortage?
China has recently implemented strict export controls on several rare earth materials, including dysprosium, gadolinium, terbium, lutetium, and others. These curbs were tightened in April 2025 in response to ongoing trade tensions and tariff threats from the United States. As a result, Foxconn’s Telangana plant began experiencing disruptions due to the inability to obtain timely shipments of dysprosium.
How Did Foxconn and Indian Authorities Respond?
Foxconn quickly brought the supply issue to the attention of the Telangana state government, which in turn escalated the matter to key national ministries, including the Ministry of Electronics and IT (MeitY) and the Department for Promotion of Industry and Internal Trade (DPIIT). The company requested urgent help to obtain the necessary export end-user certificates, which are required by Chinese authorities before shipping sensitive materials like dysprosium.
Although Foxconn claimed there was no full production halt, sources confirm that manufacturing slowed considerably. The company is reportedly working with limited stock, stretching available reserves as far as possible while awaiting further shipments.
Impact on Apple and Its Broader Strategy:
The Telangana facility is significant for Apple, as it forms a central piece of the company’s strategy to diversify manufacturing away from China. Foxconn, along with Tata Electronics, is one of Apple’s primary Indian partners, responsible for rapidly scaling up production of flagship products like iPhones and AirPods. However, the rare earth shortage has put a spotlight on the ongoing dependencies Apple faces, not just in terms of skilled personnel but also for specialized materials and machinery.
Compounding the issue, Foxconn recently had to send back over 300 Chinese engineers and technicians from India, which further slowed operations. While Taiwanese professionals have filled some gaps, the broader concern remains the unbroken supply of essential input materials.
What’s Next for the Telangana Plant?
Officials anticipate that approval for rare earth exports from China may come within 45–50 days from application, and Foxconn’s logistics team hopes the situation will stabilize soon. In the meantime, production continues at a reduced pace, and Apple is said to be monitoring the situation closely. Should supply chains not improve, Apple may consider shifting more AirPods manufacturing back to China or possibly exploring other countries as alternatives.
Conclusion:
Foxconn’s struggle at its Telangana facility sheds light on the intricate web of the global electronics supply chain. As production continues under strain, this episode highlights how geopolitical dynamics and resource dependencies can impact even the most advanced manufacturing operations-and why diversification, while possible, requires more than simply relocating assembly lines.
