Apple assembler Luxshare set to transform iPhone production landscape with major acquisition

As part of Tim Cook’s plan to strengthen ties with China-based suppliers and enhance relations with the Chinese Communist Party, the company’s Chinese partner, Luxshare Precision Industry Co, is poised to take over an iPhone assembly site from Taiwanese competitor Pegatron Corp.

Debby Wu for Bloomberg News:
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Luxshare is set to buy a 62.5% stake in Pegatron Corp.’s Kunshan unit in eastern China for about 2.1 billion yuan ($300 million), according to an exchange filing by the latter on Thursday. Taipei-based Pegatron currently assembles iPhones at its Kunshan campus and another site in Shanghai.

The acquisition is expected to give Luxshare a better chance at competing with Taiwan’s Foxconn Technology Group, Apple’s primary manufacturing partner. Foxconn makes about 70% of all iPhones with the bulk assembled at its main site in central China.

Apple has been cultivating Chinese suppliers including Luxshare, seeking to boost its standing in Beijing. The Cupertino, California-based company relies on the Greater China region for about 20% of its total sales, prompting Chief Executive Officer Tim Cook to say in March that the company’s relationship with the world’s second-largest economy is a symbiotic one.

Luxshare’s prominence within the Apple supply chain has risen swiftly in recent years. It now makes a range of products for the US customer, including iPhones, Apple Watch and mixed reality headset Vision Pro. In October, Cook visited a Luxshare plant and praised the Chinese company’s commitment to help Apple reduce carbon emissions.

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MacDailyNews Take: What a tenuous tightrope Cook has forced Apple to walk.
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