China’s Luxshare builds iPhone mega-plant to challenge Foxconn

What They Say

Nikkei reports that Luxshare of China is building a ‘massive manufacturing complex’ in eastern China to break the hold of Pegatron and Foxconn have had on iPhone assembly. The factory will cover 285,000 m² (40 football fields, Nikkei said) with an investment of $1.72 billion. The company has also leased a site that was previously used by Compal. The firm aims to boost its assembly level from around 6.5 million units in 2021 to 12-15 million next year. The Nikkei said that currently Foxconn is assembling around 60% of iPhones and Pegatron around 30%.

The firm has apparently had a lot of help in local support with the appropriate licences being awarded very quickly and it should be in operation by mid-2022.

Up to now, the article said, Luxshare has mainly supplied Chinese brands such as Xiaomi, Oppo and Vivo.

What We Think

Apple, despite its sophisticated supply chain, has not been immune to challenges from chip shortages and other factors. It said in October that it had lost $6 billion in sales because of shortages. (BR)

Luxshare