Apple (NASDAQ: AAPL) has long depended on a small number of Chinese and Taiwanese factories to assemble most of its ultra-popular iPhone devices. In mainland China, Foxconn's assembly lines churn out Apple products at an immense scale. Foxconn's main plant in Zhengzhou employs 200,000 people, and the company is ultimately responsible for around 70% of global iPhone production.

There have always been massive risks associated with Apple's manufacturing strategy, and they have been well known for years. For one, depending on such a small number of suppliers for something as critical as iPhone assembly puts Apple at risk of major disruption if something goes wrong at one of those massive plants.

That concentration risk is supercharged by the fact that these plants are largely located in China and Taiwan. Relations between the U.S. and China are tense, and Taiwan is caught in the middle of that souring relationship.

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Source Fool.com