Apple Signs Luxshare for iPhone Production in China

Apple Inc. is reportedly preparing to partner with Chinese contract manufacturer Luxshare Precision Industry Co Ltd to produce high-end iPhone models, according to a Wednesday report by the Financial Times, citing sources with knowledge of the matter.

Luxshare has already been assembling limited quantities of the iPhone 14 Pro Max at its plant in Kunshan to compensate for production losses at Foxconn’s facility in Zhengzhou last year.

Founded in 2004, Luxshare became a supplier for Apple in 2011 and has progressively ascended Apple’s supply chain, starting with connector cables for iPhones and MacBooks and expanding to AirPods manufacturing.

Neither Apple nor Luxshare has responded to requests for comments regarding the report.

Analysts had anticipated that Apple would look to diversify its supplier network amid production challenges in China, which were exacerbated by employee unrest at a Foxconn-operated factory and COVID-19 lockdowns.

Foxconn, officially known as Hon Hai Precision Industry, along with Pegatron Corp, has traditionally been dominant in Apple’s supply chain.

In November, Apple cautioned about reduced shipments of its premium iPhone 14 models due to substantial production cuts.

Wall Street analysts expect a decline in iPhone shipments during the holiday quarter, particularly after significant disruptions occurred at Foxconn’s Zhengzhou facility late last year, prompted by a COVID-19 outbreak that led to many workers leaving.

As of recent updates, the Foxconn plant is nearing full production capacity, with December shipments reportedly reaching around 90% of original plans.

Industry research firm TrendForce indicated that Apple has opted to use Luxshare as one of the assemblers for the anticipated iPhone 15 Pro Max. Furthermore, TrendForce noted that Luxshare’s sole iPhone assembly facility is located in China, with no plans to establish an iPhone production line at its plant in Vietnam, which is designated for assembling Apple accessories.