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Apple’s Taiwanese iPhone Manufacturer Under Threat

Apple’s top-performing iPhone manufacturing arm in Taiwan is facing a growing threat from a Chinese company which could jeopardize its dominance in Asia.

Foxconn, which has manufactured many generations of the iPhone, has set up a taskforce to defend against rival Luxshare, which is poised to become the first mainland China-based company to assemble the smartphone.

According to Reuters, Foxconn founder Terry Gou is investigating whether Luxshare – most known for manufacturing Apple AirPods and only brings in a fraction of Foxconn’s revenue – is being boosted by the Chinese government.

The US-China trade war and the COVID-19 pandemic has intensified pressure on global supply chains, which has prompted Beijing to bolster local tech firms.

Luxshare is also reportedly gaining traction thanks to the rise of China’s “red supply chain”, where Chinese firms with alleged government support are taking on manufacturing work for tech giants such as Apple.

“Luxshare is set to rise,” a source told Reuters, calling it “just a matter of how fast it could be”.

In July, Luxshare acquired two factories belonging to another Taiwanese iPhone assembler, Wistron.

This could help increase Luxshare iPhone production by up to 30% in the next five years. According to research, Luxshare gets 58% of its revenue from Apple.

Several sources also claim Luxshare has been actively poaching employees from Foxconn and offering generous relocation fees.

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