The 30-year-old wafer factory is owned by materials, networking and laser technology company Coherent Corp. The factory’s owner said that because Apple has stopped ordering components for the Face ID recognition system by the end of fiscal 2023, the factory’s continued viability is in question.

The factory is said to mainly produce components for the iPhone's Face ID recognition system, but as Apple plans to completely switch to the Face ID system on the iPhone 16 series due to be released later this year, the demand for production has stopped. In fact, Apple gave the factory a year's notice that it planned to stop placing orders, which forced the factory to lay off more than 100 employees. Currently, the factory still employs 257 employees to fulfill the remaining contracts.

In 2021, Coherent announced an expansion of the aforementioned factory after winning a contract with Apple, but Apple stopped placing new orders, causing “catastrophic” consequences for the company.

The move also recalls an incident in 2017 when Apple decided not to use graphics chip designs from British semiconductor company Imagination Technologies, which halved the company's market value and forced Imagination Technologies to 'sell itself' later.

That said, while a company becoming part of Apple's supply chain is good news, it poses unpredictable risks to its survival should Apple make a major change.