A key Apple supplier is set to invest $300 million in an iPhone manufacturing plant in China operated by Taiwan’s Pegatron according to the report.
Shenzhen-based Luxshare Precision will buy a 62.5% stake in Pegatron’s unit in Kunshan in eastern Jiangsu province. The overall price of this deal is finalized at 2.1 billion Chinese yuan (about $300 million), according to Pegatron’s exchange filing on Thursday.
The Luxshare plant is used to make a range of products including iPhones, Apple Watch, and mixed reality headset Vision Pro.
The analyst believes that the new acquisition will allow Luxshare to compete against market leader Foxconn Technology. It is the world’s largest electronics contract manufacturer and assembles about 70% of annual iPhone devices.
Following this revelation, Luxshare rose over 4.5% in early Friday in Shenzhen trading stock. On the other hand, Pegatron lost 4.4% in Taipei. Foxconn is not much to be seen in the stock changes.
For the past few years, Apple has been heavily relying on Chinese suppliers to keep its foot strong in the country, which accounts for about 20% of its yearly sales.
A few months ago, Tim Cook also took a visit to the Luxshare plant to meet its personnel.
However, sales of iPhones are receiving tough competition from domestic smartphone makers and the performance of its recent iPhone 15 series remains descent as compared to its predecessor.
(source – SCMP)