TAIPEI (Taiwan News) — Luxshare Precision Industry is constructing an immense iPhone manufacturing complex in eastern China to challenge Taiwanese manufacturers Foxconn and Pegatron.
According to Nikkei, Luxshare is building a 285,000-square-meter manufacturing complex in Kunshan, Jiangsu Province with a US$1.72 billion (NT$47.8 billion) investment. The move signals Apple’s growing reliance on Chinese suppliers, the outlet said.
The Chinese manufacturer has also leased and remodeled a neighboring plant that was previously owned by iPad assembler Compal Electronics. Luxshare is expected to finish the initial phase of the new facility in mid-2022, according to the report.
Luxshare, which currently manufactures iPhones in a Kunshan plant purchased from Taiwan’s Winstron in 2020, is hoping to increase production from 6.5 million devices this year to between 12 million and 15 million units as early as next year, Nikkei said.
Apple ships approximately 200 million iPhones per year, with Foxconn responsible for assembling around 60% and Pegatron about 30%, per the report.
Luxshare and the Kunshan City Government had a groundbreaking ceremony at the end of October. Once completed, the complex will have 39 production lines, according to Nikkei.
The Chinese company is the fastest-growing tech manufacturer among Apple suppliers when it comes to product portfolio, Nikkei said. Starting as a supplier of connectors to Apple in 2011, Luxshare is now the most important Chinese components supplier and manufacturer of AirPods, Apple Watches, and iPhones.
The company has also opened facilities in India and Vietnam, where it makes components and puts together AirPods. It also helps Apple package and test chips used in the wireless earphones, the report said.
Analysts told Nikkei that Foxconn is still the leader when it comes to manufacturing capability and operation management, in addition to being a vital Apple partner for new products. However, Luxshare could soon directly compete with smaller Taiwanese suppliers like Pegatron and Wistron.
