Luxshare to Acquire 62.5% Stake in Pegatron Unit for $300 Million, Enhancing Competitiveness in Apple's Supply Chain

Luxshare Precision Industry Co., a key Chinese partner of Apple Inc., is set to acquire a 62.5% stake in Pegatron Corp.'s Kunshan unit in eastern China for approximately 2.1 billion yuan ($300 million). Pegatron, based in Taipei, currently handles iPhone assembly at its Kunshan campus and another facility in Shanghai. The move is seen as a strategic step for Luxshare to enhance its competitiveness against Taiwan's Foxconn Technology Group, Apple's primary manufacturing partner responsible for about 70% of all iPhones.

Apple has been actively building relationships with Chinese suppliers, including Luxshare, as it seeks to strengthen ties with Beijing. Approximately 20% of Apple's total sales come from the Greater China region. 

Luxshare's significance in the Apple supply chain has grown rapidly, with the Chinese company producing various products for Apple, including iPhones, Apple Watch, and the mixed reality headset Vision Pro. Apple's CEO, Tim Cook, visited a Luxshare plant in October, commending the company's commitment to helping Apple reduce carbon emissions.

As Apple focuses on developing relationships with mainland Chinese suppliers, it is also diversifying its production locations amid ongoing tensions between the United States and China. Apple has been working with Foxconn and Pegatron to expand its manufacturing footprint in India.

 

The acquisition of a stake in Pegatron's Kunshan unit represents Luxshare's strategic move to strengthen its position in the competitive landscape of Apple's supply chain.