Apple's Chinese Partner Luxshare Set to Transform iPhone Production Landscape with Major Acquisition
Apple Inc (NASDAQ: AAPL) Chinese partner, Luxshare Precision Industry Co, is poised to take over an iPhone assembly site from Taiwanese competitor Pegatron Corp.
This move is part of Apple's strategy to strengthen ties with China-based suppliers and enhance relations with Beijing.
Luxshare is acquiring a 62.5% stake in Pegatron's Kunshan unit in eastern China for approximately 2.1 billion yuan ($300 million), Bloomberg cites a recent exchange filing.
This acquisition will likely position Luxshare more competitively against Taiwan's Hon Hai Precision Industry Co (OTC: HNHPF), operating as Foxconn Technology Group, Apple's leading manufacturing partner. Foxconn assembles around 70% of all iPhones, primarily in central China.
Also Read: Apple Supplier Foxconn Raises Investment Plans for New Component Plants in India's Karnataka
Apple's focus on fostering relationships with Chinese suppliers, including Luxshare, is driven by its reliance on the Greater China region, which accounts for about 20% of its total sales.
CEO Tim Cook has emphasized the mutual benefits of Apple's relationship with the second-largest economy in the world.
Luxshare has rapidly grown within Apple's supply chain, producing various products, including iPhones, Apple Watches, and the mixed-reality headset Vision Pro.
CEO Tim Cook's recent visit to a Luxshare plant highlighted the company's commitment to Apple's carbon emission reduction goals.
However, amid ongoing tensions between Washington and Beijing, Apple is also diversifying its production, shifting some away from the region.
It is expanding its manufacturing footprint in India, relying on Foxconn and Pegatron for this initiative.
Price Action: AAPL shares traded higher by 0.44% at $194.01 on the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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