Apple is cuddling up to more Chinese manufacturers than ever before with their new iPhones due to be released in September packed with Chinese made components, the range is also assembled by Chinese Companies.
Apples who appear to be giving a two-finger salute to the US Government despite Washington’s attempts to rein in Beijing’s tech ambitions and to get more manufacturers to invest in US manufacturing.
Recently Samsung announced a $20 Billion dollar investment in a new Texas based manufacturing operation.
Chinese electronics maker Luxshare Precision Industry will build up to 3% of the upcoming iPhone 13 series, winning orders away from Taiwanese rivals Foxconn and Pegatron.
Apple is slated to produce between 90 million and 95 million of the new iPhones through January with Chinese manufacturers the big winners at the expense of Taiwanese and Vietnamese manufacturers.
According to Nikki Asia, Luxshare will start building the iPhone 13 Pro this month, according to sources, a major breakthrough for a company that has never produced iPhones on its own.
Newcomers to the Apple supply chain normally start out making older iPhone models.
Two companies that Luxshare acquired last year, South Korean camera module maker Cowell and metal frame maker Casetek of Taiwan, will also supply key components and parts for this year’s new iPhones, sources familiar with the matter said.
ChannelNews understands that Apple executives have worked with Luxshare to help them acquire businesses. They are also using Luxshare as a means to get Foxconn to reduce their costs with the introduction of competition.
This has failed in the past for Apple with their investment in sourcing from Japan Display and LG Display, proving costly for the US Company who were forced to go back to Samsung for their supply of OLED screens as both Japan Display and LG Display struggled to deliver the volumes that Apple needed for their iPhones.
“Although Luxshare only makes a small percentage of iPhones this year, we can’t let our guard down,” said a senior executive at a rival iPhone supplier. “If we don’t strengthen our competitiveness, sooner or later they will be the major source.”
Apple boasts the world’s most complex consumer electronics supply chain, churning out roughly 200 million iPhones, 20 million MacBooks and tens of millions of AirPods a year. The company’s notoriously high manufacturing standards mean that any company in its supply chain is seen as being among the best in its field.
The rise of Chinese Apple suppliers comes at the expense of rivals in the U.S., Taiwan, Japan and South Korea, several of whom are either seeing their share of orders shrink or who have dropped out of the Apple supply chain completely.
