Apple supplier Luxshare unnerves Foxconn as U.S.-China feud speeds supply chain shift

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Apple's top iPhone assembler, Taiwan-based Foxconn, has set up a task force to fend off the growing clout of Chinese electronics manufacturer Luxshare, which it believes poses a serious threat to its dominance, three sources with knowledge of the matter said.

top iPhone assembler, Taiwan-based Foxconn, has set up a task force to fend off the growing clout of Chinese electronics manufacturer Luxshare, which it believes poses a serious threat to its dominance, three sources with knowledge of the matter said.

The task force, which the sources say was created last year, has been looking into Luxshare’s technology, expansion plan, hiring strategy and whether the company - which currently makes only 5% of Foxconn’s revenue - is supported by any Chinese government entity. One of the sources called it a “formidable opponent”, and said Foxconn has been conducting extensive research on Luxshare, aiming to “defeat it completely.”The sources, who have direct knowledge of the matter and are familiar with Foxconn’s thinking, declined to be named citing the sensitivity of the issue.

Foxconn told Reuters in a statement the task force described in this story is “not grounded in facts” and there were “no meetings or any other contact.” Its journey up Apple’s value chain has been driven in part by acquiring smaller components makers, starting with the manufacturing of connector cables for the iPhone and Macbook through a 2011 acquisition of its Dongguan neighbour Lanto Electronics, then by making acoustic components for the iPhone, and eventually by manufacturing airpods.

 

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