Tim Cook visiting a Luxshare factory
Apple supplier Luxshare is acquiring an iPhone assembly factory from a competitor after purchasing a majority stake in the facility.
Luxshare is purchasing a 62.5% stake in Pegatron’s Kunshan factory in eastern China for approximately $300 million (2.1 billion yuan), according to a recent exchange filing. Pegatron, headquartered in Taipei, currently manufactures iPhones at its Kunshan campus and another location in Shanghai.
The supplier intends to gain a competitive advantage over Taiwan’s Foxconn Technology Group, Apple’s main manufacturing partner. Foxconn currently assembles around 70% of all iPhones, primarily in central China.
Luxshare’s increasing role in Apple’s supply chain is evident as it produces various products for the company, including iPhones, Apple Watch, and the sole manufacturer for the Apple Vision Pro headset. Additionally, Luxshare chair Wang Laichun stated that the company manufactures three of the four models of the iPhone 15.
Apple has been actively cultivating ties with Chinese suppliers, including Luxshare, to bolster its presence in Beijing, as reported by Bloomberg. The Greater China region makes up about 20% of Apple’s total sales.
While Apple strengthens its relationships with mainland suppliers, it is also diversifying its production base by moving some manufacturing away from the region amid ongoing tensions between Washington and Beijing. The tech company is also enlisting Foxconn and Pegatron to expand its manufacturing presence in India.
