Luxshare building massive new iPhone factory to challenge Foxconn

Apple supplier Luxshare Precision is building a "mega-plant" in China to boost its iPhone assembly capabilities and challenge Taiwanese rivals like Foxconn and Pegatron.

The company is reportedly building a 285-000-square-meter manufacturing facility in Kunshan City, China, Nikkei reported Wednesday. It plans to complete the first phase of the new manufacturing park in the middle of 2022, and could produce iPhone models sometime that year.

Luxshare invested $1.73 billion into the project, which will help it meet its goal of significantly boosting its iPhone assembly capabilities. The company hopes to increase its volume from 6.5 million units to 12 million to 15 million units as soon as 2022.

Along with the new manufacturing park — which spans 40 football fields — Luxshare also leased and renovated a nearby plant previously owned by iPad assembler Compal.

The announcement could foreshadow a shake-up in Apple's supply chain, which is increasingly moving assembly from Taiwan to China. Earlier in 2021, nearly one-third of companies Apple that added to its supply partners lists were located in mainland China.

Apple currently relies on Taiwanese firms like Foxconn and Pegatron for the majority of its iPhone assembly. Foxconn assembles about 60% of the company's smartphones, with Pegatron accounting for 30%.

The tides could be changing, however. Luxshare also assembles Apple's popular AirPods. Earlier in 2021, the company won a contract to build around 3% of Apple's iPhone 13 models.

Apple has come under fire in recent years for its reliance on Chinese companies and manufacturing capabilities. In May 2021, a group of U.S. lawmakers urged Apple to exit China, citing the company's concessions to the Chinese government, among other reasons.

16 Comments

rccrd 14 Years · 2 comments

About 2 years ago

To me that is really concerning. I thought the idea was to move OUT of China not move IN. It's a pity that Apple cannot structure itself in a way that is less reliant on Chinese manufacturing but it is actually working towards strengthening its ties there. To me as a consumer for both political as well as security reasons it's becoming more and more important to choose products that are manufactured in a country with at least a decent respect of human rights. Just a pity!

MacPro 18 Years · 19845 comments

rccrd said:

To me that is really concerning. I thought the idea was to move OUT of China not move IN. It's a pity that Apple cannot structure itself in a way that is less reliant on Chinese manufacturing but it is actually working towards strengthening its ties there. To me as a consumer for both political as well as security reasons it's becoming more and more important to choose products that are manufactured in a country with at least a decent respect of human rights. Just a pity!

Given the size of the Chinese market, it is probably a good idea since worst case, it can supply that market if nothing else. What happens if China bans imports from Taiwan should that conflict grow?

waveparticle 3 Years · 1497 comments

This proves that Chinese companies are able to manufacture Apple products with high quality cheaply that other nations cannot do.

chadbag 13 Years · 2029 comments

MacPro said:

rccrd said:

To me that is really concerning. I thought the idea was to move OUT of China not move IN. It's a pity that Apple cannot structure itself in a way that is less reliant on Chinese manufacturing but it is actually working towards strengthening its ties there. To me as a consumer for both political as well as security reasons it's becoming more and more important to choose products that are manufactured in a country with at least a decent respect of human rights. Just a pity!

Given the size of the Chinese market, it is probably a good idea since worst case, it can supply that market if nothing else. What happens if China bans imports from Taiwan should that conflict grow?

Well , the "Taiwanese" assemblers don't actually assemble in Taiwan. They assemble in China, so any ban on Taiwan imports wouldn't affect stuff assembled in China, though it could affect the import of SoC and other chips actually made in Taiwan, which is a problem even with China based assemblers.

waveparticle said:

This proves that Chinese companies are able to manufacture Apple products with high quality cheaply that other nations cannot do.

This does not prove that since the assembly of the phones has been in China this whole time anyway. This just changes the Corp address of the HQ to China for those phones.