Chinese electronics maker Luxshare Precision Industry will build up to 3% of the next iPhone 13 series, winning orders from Taiwanese rivals Foxconn and Pegatron, Nikkei Asia has learned. Apple is expected to produce between 90 and 95 million new iPhones through January.
Luxshare will start building the iPhone 13 Pro – as the premium model should be called – this month, sources say, a major breakthrough for a company that has never produced an iPhone on its own. Newcomers to Apple’s supply chain normally start by making older iPhone models. Two companies Luxshare acquired last year, South Korean camera module maker Cowell and Taiwan-based metal frame maker Casetek, will also provide key components and parts for this year’s new iPhones, reports said. sources close to the case.
“Although Luxshare only manufactures a small percentage of iPhones this year, we cannot let our guard down,” said a senior executive at a rival iPhone supplier. “If we don’t strengthen our competitiveness, sooner or later they will be the main source. “
Apple has the world’s most complex consumer electronics supply chain, producing approximately 200 million iPhones, 20 million MacBooks, and tens of millions of AirPods per year. The company’s notoriously high manufacturing standards mean that any company in its supply chain is considered to be one of the best in its field.
The rise of Apple’s Chinese suppliers comes at the expense of competitors in the United States, Taiwan, Japan and South Korea, many of which are seeing their share of orders decline or who have abandoned the supply chain altogether. from Apple.
China’s success also comes despite an ongoing US crackdown on Chinese chipmakers, including trade restrictions aimed at blocking their access to vital US tools and technologies.
Hunan-based Lens Technology previously provided only glass backs and protective glasses for iPhone, but this year it will also provide metal cases for the first time, Nikkei has learned, thanks to its acquisition last year. a rival’s Chinese frame and box factories.
Meanwhile, China’s largest smartphone lens maker Sunny Optical Technology has entered the iPhone supply chain for the first time this year, people familiar with the matter said. The Hong Kong-listed company will supply rear camera lenses, although its share is still small, according to the sources.
Based in Zhejiang province, Sunny Optical – a key supplier to the Chinese Xiaomi, Huawei, Oppo and Vivo – has long been viewed as a key competitor to Largan Precision of Taiwan, the leading manufacturer of high-end smartphone lenses and a longtime iPhone supplier. Sunny Optical’s revenue nearly tripled from 2016, while its net profit quadrupled.
BOE Technology will begin supplying high-end organic LED displays for the iPhone 13 series as early as the next quarter if it receives approval from Apple this quarter, said two people familiar with the situation. It started supplying OLED displays for older iPhone models last year.
Beijing sees BOE as the country’s best hope to challenge Samsung, the world’s largest and most advanced OLED supplier. Apple also wants to integrate the Chinese display maker into the iPhone supply chain in order to increase its bargaining power with Samsung.
Several other Chinese companies first appeared on Apple’s supplier list last year, including display maker Tianma Micro-Electronics, memory chip maker GigaDevice Semiconductor and Nexperia, owned by the world’s largest assembler. smartphones from China, Wingtech Technology.
Wingtech is also in the process of purchasing the UK’s largest chip factory, Wales-based Newport Wafer Fab, through Nexperia.
Shenzhen Everwin Precision Technology, a rival of Taiwan’s Catcher Technology and Foxconn’s casing unit, also first appeared on the top 200 supplier list last year.
Eric Tseng, chief analyst at Isaiah Research, said companies like Luxshare, Goertek, Wingtech and Lens have all recently secured orders in Apple’s supply chain. The rise of Luxshare – which started providing relatively simple components for iPhones just a few years ago – will likely be a bargaining chip for Apple against its longtime manufacturing partner Foxconn, he said. he adds.
“We anticipate Apple’s need to diversify its supplies and manage its costs amid geopolitical uncertainties that will continue to increase in the years to come, which will give Chinese suppliers a good opportunity to increase their share in the chains. supply and create greater pressure on existing suppliers, ”Tseng told Nikkei Asia.
Apple, Luxshare, Lens, BOE and Sunny Optical did not respond to Nikkei’s Asia requests for comment at the time of posting.