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Apple’s key Chinese manufacturing partner Luxshare Precision Industry Co is set to gain control of an iPhone assembly site run by Taiwanese rival, Pegatron. According to a report by South China Morning Post, Luxshare is set to buy a 62.5% stake in Pegatron Corp’s unit in Kunshan, which is also China’s most affluent county in eastern Jiangsu province. An exchange filing by the Taiwanese firm confirms that the Chinese manufacturer is set to pay about 2.1 billion yuan ($300 million) for this stake. Currently, Taipei-based Pegatron uses its Kunshan campus and another site in Shanghai to assemble iPhones.
The latest acquisition is expected to give Luxshare a better chance to compete with Apple’s primary contract manufacturing partner, the Foxconn Technology Group. Foxconn, which was previously known as Hon Hai Precision Industry, is the world’s largest electronics contract manufacturer and makes about 70% of all iPhones. The bulk of these iPhones are assembled by the company at its main production site in Zhengzhou, in China’s central Henan province.
How this takeover will help Apple
This takeover will help the Cupertino-based tech giant to improve relations with Beijing by fostering ties with mainland China-based suppliers. To help boost its standing in Beijing, the company has been cultivating Chinese suppliers, including Luxshare.
The iPhone maker is dependent on the Greater China region for about 20% of its total sales. In March 2023, Apple’s chief executive Tim Cook also said that the company’s relationship with the world’s second-largest economy is symbiotic.
The latest acquisition is expected to give Luxshare a better chance to compete with Apple’s primary contract manufacturing partner, the Foxconn Technology Group. Foxconn, which was previously known as Hon Hai Precision Industry, is the world’s largest electronics contract manufacturer and makes about 70% of all iPhones. The bulk of these iPhones are assembled by the company at its main production site in Zhengzhou, in China’s central Henan province.
How this takeover will help Apple
This takeover will help the Cupertino-based tech giant to improve relations with Beijing by fostering ties with mainland China-based suppliers. To help boost its standing in Beijing, the company has been cultivating Chinese suppliers, including Luxshare.
The iPhone maker is dependent on the Greater China region for about 20% of its total sales. In March 2023, Apple’s chief executive Tim Cook also said that the company’s relationship with the world’s second-largest economy is symbiotic.
In recent years, Luxshare’s prominence within the Apple supply chain has also grown swiftly. The Chinese manufacturer now makes a range of products for the US brand which includes iPhones, Apple Watch as well as mixed-reality headset Vision Pro.
In October 2023, Cook even visited a Luxshare plant and praised the Chinese company’s commitment to help Apple reduce carbon emissions.
Meanwhile, as Apple cultivates its mainland Chinese suppliers at the expense of Taiwanese contract manufacturers, the company is also shifting some of its production away from the region amid tensions between Washington and Beijing. To expand its manufacturing footprint in India, Apple is now relying on Foxconn and Pegatron.
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