Apple supplier Luxshare unnerves Foxconn as US-China feud speeds supply chain shift
- Foxconn set up a task force to counter rising Apple supplier Luxshare
- Dongguan-based Luxshare could capture 30 per cent of iPhone production within the next five years, according to an analyst
Apple’s top iPhone assembler, Taiwan-based Foxconn Technology Group, has set up a task force to fend off the growing clout of Chinese electronics contract manufacturer Luxshare Precision Industry Co, which it believes poses a serious threat to its dominance, three sources with knowledge of the matter said.
The project was initiated by Foxconn founder Terry Gou Tai-ming, according to one of the sources, to target Dongguan-based Luxshare, which is little-known internationally but is poised to become the first mainland China-headquartered firm to assemble iPhones – a turf until now dominated by Taiwanese manufacturers.
The task force, which the sources say was created last year, has been looking into Luxshare’s technology, expansion plan, hiring strategy and whether the company – which currently makes only 5 per cent of Foxconn’s revenue – is supported by any Chinese government entity.
While the US-China trade war and the coronavirus crisis have intensified pressure on global supply chains, an increasingly acrimonious tech feud between the economic giants has also prompted Beijing to strengthen efforts on creating world-leading local tech firms – and Luxshare’s growth trajectory fits into that mould.
“Luxshare is set to rise … it’s just a matter of how fast it could be,” one of the sources said.
“It makes sense for China to build up its own supply chain and Luxshare is in line with that state policy.”