Apple supplier Luxshare to take control of key iPhone plant in eastern China via US$300 million deal with Taiwan’s Pegatron

Apple’s key Chinese manufacturing partner Luxshare Precision Industry Co is set to gain control of an iPhone assembly site run by a Taiwanese rival, as the US tech giant fosters ties with mainland China-based suppliers to improve relations with Beijing.

Luxshare is set to buy a 62.5 per cent stake in Pegatron Corp’s unit in Kunshan, China’s most affluent county in eastern Jiangsu province, for about 2.1 billion yuan (US$300 million), according to an exchange filing by the Taiwanese firm on Thursday. Taipei-based Pegatron currently assembles iPhones at its Kunshan campus and another site in Shanghai.

The acquisition is expected to give Luxshare, which is also known as Luxshare-ICT, a better chance at competing with Foxconn Technology Group, Apple’s primary contract manufacturing partner.

Formally known as Hon Hai Precision Industry, Foxconn is the world’s largest electronics contract manufacturer and makes about 70 per cent of all iPhones, with the bulk assembled at its main production site in Zhengzhou, capital of central Henan province.