Apple's Luxshare will take over a rival iPhone assembly plant after buying a majority stake in the plant. Luxshare Precision acquired Pegatron United's Kunshan factory in eastern China5% stake. The deal, which is worth about $300 million (2.1 billion yuan), was revealed in a recent exchange filing, with Taipei-based Pegatron currently assembling iPhones at its Kunshan and Shanghai factories.
The company's goal is to gain an edge over Apple's main production partner, Taiwan's Foxconn Technology Group. Foxconn currently assembles about 70 percent of its iPhones, mainly in central China.
Luxshare's rise in the Apple chain is evident as it manufactures a range of products for Apple, including iPhones and Apple Watches, and is the sole manufacturer of Apple's Vision Pro headsets. In addition, Wang Laichun, chairman of Luxshare Precision, has said that the company produces three of the four iPhone 15 models.
According to Bloomberg, Apple has been actively promoting relationships with China's top merchants, including Luxshare Precision, to strengthen its position in the Chinese regional market, which accounts for about 20% of Apple's total sales.
While Apple has deepened its ties with China, it has also moved some of its production outside of China amid tensions between Washington and China. The tech company has also relied on Foxconn and Pegatron to expand its production footprint in India and diversify its production base.
Luxshare Precision's acquisition of Pegatron Kunshan not only affects the balance of power among Apple's top players in Asia, but also reflects the geopolitical and economic factors affecting the technology industry.