Luxshare Precision Industry Co., a key manufacturing partner of Apple, plans to acquire a 62.5% stake in Pegatron Corp’s iPhone production plant in Kunshan, China. The value of this agreement, totaling approximately $300 million, will enable Luxshare to strengthen its position in the competitive market of iPhone production.
Through the acquisition of the Pegatron plant, Luxshare aims to enhance its ability to compete with Apple’s main contract manufacturer, Foxconn Technology Group. With this takeover, Luxshare will be able to increase its production capabilities and potentially secure more orders from Apple.
This decision also benefits Apple as it strengthens its relationship with Beijing and develops closer ties with suppliers from mainland China. Since Apple heavily relies on the Greater China region, which accounts for 20% of its sales, building closer partnerships with Chinese suppliers is crucial for the growth and success of the tech giant in the Chinese market.
Luxshare’s significance in Apple’s supply chain has been rapidly growing in recent years. The Chinese manufacturer currently produces various products for Apple, including iPhones, Apple Watches, and mixed reality sets like Vision Pro. Luxshare’s capabilities and its commitment to sustainable development, praised by Apple CEO Tim Cook, make it an attractive partner for the tech giant.
As Apple seeks to strengthen relationships with Chinese suppliers, it is also diversifying its production beyond this region due to geopolitical tensions. The company is increasingly expanding its manufacturing operations in India, relying on the support of Foxconn and Pegatron to enhance its presence in the country.
In conclusion, Luxshare’s acquisition of the Pegatron plant paves the way for increased competition in the iPhone production sector and strengthens Apple’s ties with Chinese suppliers. This strategic move aligns with Apple’s long-term goal to diversify its production and maintain a symbiotic relationship with the growing Chinese economy.
The source of the article is from the blog macholevante.com