Luxshare, the Chinese technology company, is poised to solidify its standing as a major player in iPhone manufacturing by becoming the world’s second-largest iPhone assembler. Recent developments indicate Luxshare’s ascent, with the company set to take over the majority of business from Pegatron’s plant in Kunshan, China.
According to Nikkei Asia, Luxshare’s strategic move involves a significant investment of $296 million in Pegatron’s Kunshan plant for capital expansion. This substantial investment will result in Pegatron’s stake in the facility decreasing from 100% to 37.5%, ultimately granting Luxshare control of the plant and positioning itself as the second-largest iPhone manufacturer globally, just behind Foxconn.
Pegatron, acknowledging the dynamic market and industrial environment, sees this move as an opportunity to reallocate resources effectively. The capital injection from Luxshare aims to enhance regional manufacturing efficiency, achieve a balanced deployment, and strengthen overall competitiveness.
Luxshare’s growing role as an iPhone assembler underscores the deepening ties between the Chinese firm and Apple. Luxshare is not only a key iPhone manufacturer but also the exclusive producer of Apple’s upcoming spatial computer, Apple Vision Pro, slated for release in early 2024.
While Pegatron is relinquishing control of the Kunshan plant, it doesn’t imply a cessation of iPhone production by the Taiwanese company. Instead, Pegatron is strategically reinvesting and expanding its operations, particularly focusing on the burgeoning market in India. Recent reports suggest Apple’s plan to produce 25% of iPhones in India within the next two to three years, aligning with Pegatron’s investment strategy.
On the flip side, Luxshare is facing challenges in establishing iPhone production in India due to the escalating tensions between China and India. Despite this hurdle, Luxshare remains a pivotal supplier for Apple, manufacturing a range of products, including iPhones, AirPods, Apple Watches, HomePods, and the highly anticipated Apple Vision Pro.
As Luxshare cements its role as a significant iPhone assembler, its deepening partnership with Apple highlights the company’s pivotal position in the tech giant’s global supply chain.
