Apple is recruiting more and more Chinese suppliers in key positions in the production of the latest iPhones. Business policy runs counter to the official position of Washington, which is determined to limit China's technological ambitions as tightly as possible.
According to the Nikkei Asian Review , China's Luxshare Precision Industry will be able to produce up to 3% of the iPhone 13 series smartphones, effectively taking a stake from Taiwanese rivals Foxconn and Pegatron. Although the percentage is still relatively small, given the scale of production, it should not be taken lightly - until January, Apple intends to release 90-95 million copies of new products.
Luxshare is known to begin shipping the iPhone 13 Pro this month - a big advance for a company that has never produced an iPhone on its own. Usually, newcomers to the Apple supply chain are initially entrusted with releasing only more budget versions of smartphones. The components for the assembly will be supplied by the South Korean manufacturer of camera modules Cowell and the Taiwanese manufacturer of metal frames Casetek, acquired by Luxshare last year. Although the Chinese company will only be producing a small percentage of smartphones this year, one shouldn't be vigilant, according to one competitor in the Apple supply chain, sooner or later China will become the main supplier if it does not increase the competitiveness of its own products.
Apple today has one of the most complex value chains, producing approximately 200 million iPhones, 20 million Macs and tens of millions of iPads annually. In order to be among the partners, it is necessary to meet the strict production standards of the customer.
The “rise” of Chinese suppliers comes at the expense of competitors from the United States, Taiwan, Japan and South Korea, some of which have either already been excluded from the chain, or their share has significantly decreased. At the same time, even the US sanctions, designed to restrict China's access to key American "tools" and technologies, cannot affect the success of Chinese business.
Previously, China's Lens Technology supplied only glass rear covers and display glass covers, but this year it will also supply metal casing elements. Sunny Optical Technology, China's largest smartphone camera optics manufacturer, has hit Apple's supply chain for the first time this year.
Sunny Optical has long been known in the market. It is a key optics manufacturer for Xiaomi, Huawei, Oppo and Vivo. Sunny Optical's revenues have tripled since 2016 and net income has quadrupled.
BOE Technology will be shipping premium OLED displays for the iPhone 13 in the next quarter, if it gets Apple approval this year. The company began shipping for older iPhones last year.
Other Chinese businesses first appeared on Apple's list of suppliers, including display manufacturer Tianma Micro-Electronics, memory chip suppliers GigaDevice Semiconductor and Nexperia. For the first time, Shenzhen Everwin Precision Technology has appeared on the list.
According to Isaiah Research analyst Eric Tseng, Luxshare, which recently supplied only the simplest components to the smartphone maker, looks like it will soon bargain with Apple for the supply of chips instead of the company's longtime partner Foxconn.
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