Apple supplier Luxshare Precision is building a mega-factory in China to improve its iPhone assembly capabilities and challenge Taiwanese rivals such as Foxconn and Pegatron.
According to Nikkei, Luxshare Precision is building a 285,000 square meter manufacturing plant in Kunshan City, China. The company plans to complete the first phase of the new production fleet in mid-2022 and may produce new iPhones during this year.
Luxshare has invested $ 1.73 billion in the project, which will help achieve the goal of dramatically increasing its iPhone assembly capabilities. The company hopes to increase its volume from 6.5 million to 15 million units by 2022. Along with the new production park, which covers an area equal to that of 40 football fields, Luxshare has also leased and renovated a facility. nearby formerly owned by Compal.
This news could herald a shift in Apple’s supply chain, which is increasingly shifting manufacturing from Taiwan to China. At the start of 2021, nearly a third of the companies Apple added to its supply chain were located in mainland China.
Apple currently relies on Taiwanese companies such as Foxconn and Pegatron to assemble most iPhones. Suffice to say that Foxconn takes care of 60% of the production of Apple smartphones, while Pegatron reaches 30%. However, things could change by mid-2022, with Luxshare able to increase its iPhone production capacity, now stuck at 3%.
Remember that Luxshare also produces AirPods and therefore enjoys full confidence from Apple.