iPhone 13 production gets boost as Apple adds third Chinese maker, Luxshare

Apple has given Chinese electronics maker Luxshare Precision Industry a big promotion, tapping the company for iPhone 13 production alongside Foxconn and Pegatron. A plan for this was first suggested more than a year ago, and is seemingly now confirmed.

The company currently makes several iPhone components, but this move by Apple is a highly unusual one, letting a new assembler make the latest flagship models …

To date, Luxshare has made AirPods, as well as haptic engine modules, camera modules, and metal frames for iPhones. However, it has no experience of the final iPhone assembly process.

Apple does occasionally bring new assemblers on board, as it did with Wistron in India, but the Cupertino company normally eases them in with contracts for older models first. Nikkei Asia says this isn’t the case this time.

Apple is tapping more suppliers in China for key roles in producing the latest iPhone, a sign that the country’s technological competitiveness is continuing to increase despite Washington’s attempts to rein in Beijing’s tech ambitions.

Chinese electronics maker Luxshare Precision Industry will build up to 3% of the upcoming iPhone 13 series, winning orders away from Taiwanese rivals Foxconn and Pegatron, Nikkei Asia has learned. Apple is slated to produce between 90 million and 95 million of the new iPhones through January.

Luxshare will start building the iPhone 13 Pro — as the premium model is expected to be called — this month, according to sources, a major breakthrough for a company that has never produced iPhones on its own. Newcomers to the Apple supply chain normally start out making older iPhone models.

The 3% share does mean that Apple is not overly dependent on Luxshare for this year’s iPhone 13 production, but that percentage is likely to increase if all goes well. Apple prefers to have multiple suppliers throughout its supply chain, both to decrease the risk of a single point of failure, and to strengthen its negotiating position.

One senior exec at either Foxconn or Pegatron is cited as acknowledging this.

“Although Luxshare only makes a small percentage of iPhones this year, we can’t 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 major source.”

The full piece details other supply-chain changes Apple is making, including bringing on board lens maker Sunny Optical and OLED supplier BOE Technology.

Analysts are optimistic about iPhone 13 demand, with Apple also expected to return to its traditional September launch schedule for this year’s lineup.

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