Luxshare Precision Industry is building a massive manufacturing complex in eastern China as it aims — with Apple’s blessing — to break the decadelong hold that Taiwanese rivals Foxconn and Pegatron have on iPhone assembly.
Lauly Li, Cheng Ting-Fang, and Shunsuke Tabeta for Nikkei Asia:
Luxshare, China’s most prominent player in the Apple supply chain, is building a 285,000 sq. meter manufacturing park in Kunshan, Jiangsu Province, with a total investment of 11 billion yuan ($1.72 billion). The sprawling site — covering an area the size of 40 football fields — will churn out millions of iPhones as early as next year.
In addition to the new complex, Luxshare has also leased and remodeled an adjacent facility that was previously owned by iPad assembler Compal Electronics, according to company filings and government environmental assessment papers seen by Nikkei Asia.
Luxshare is set to complete the first phase of its new complex around the middle of 2022, according to the construction floor plan and government documents obtained by Nikkei Asia.
Armed with the new facility, the Chinese supplier aims to significantly increase its share of iPhone assembly, from about 6.5 million units in 2021 to between 12 million and 15 million units by as early as next year, people briefed on the matter told Nikkei Asia. Luxshare currently builds iPhones in another facility in Kunshan that it bought from Taiwan’s Wistron in the summer of 2020.
Apple ships around 200 million iPhones a year, with Foxconn assembling nearly 60% of those and Pegatron around 30%.
Technovanguard Take: The more suppliers and assemblers that exist to pit against each other in competition for Apple’s business, the better. That said, concentrating any part of Apple’s business in China, especially iPhone assembly, is a risk and makes Apple even more beholden to the whims and dictates of the Chinese Communist Party. But, hey, by the time that piper is to be paid, Tim Cook will likely be gone, so it’ll be the next CEO’s problem.
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