Apple Inc. continues its efforts in strengthening supply chains in China despite US 'decoupling' against China. The company encouraged one of its Chinese suppliers to invest in a Taiwanese company for its products to boost manufacturing capacities.
Apple Inc. has considered a formidable alternative to one of its largest supplier Taiwanese company Foxconn. The iPhone device maker accounts for 50 percent of the manufacturing operations for Apple.
The company encouraged a fast-growing Chinese manufacturer Luxshare-ICT that assembles Apple's Airpods. Both companies have been in talks with Taiwan's Catcher Technology. Catcher could give Luxshare the go-signal to produce high-quality metal casings and access to smartphone assembly information.
The award to mass produces Apple products might enable the Chinese company Luxshare to be one of the largest suppliers for the company like Foxconn. The move might also help Luxshare enhance its ability to have a crucial role in Apple's manufacturing process.
According to a supply chain manager of Apple, the deal would be a win-win situation. Luxshare could boost its company growth, while Apple could strengthen its supply chain operations in China. The manager also noted that Chinese companies offer lower prices for their services with competitive delivery of quality products. He also hinted that Apple might enhance its reach to the 1.3 billion markets in China.
Last November, Patently Apple reported that the company's Chinese suppliers might double up Airpods production in response to higher demand for the product. The report also claimed that Luxshare follows a wolf-like company culture and manifests aggressiveness in attacking the market. It was also highlighted that the company consists of young businessmen and deliver its services fast.
Catcher, on the other hand, has been making metal cases for Apple products such as the iPhone and MacBook. The company was reported to move their production outside of China caused by the rising tensions with the US.
Furthermore, Luxshare was also believed to be in talks with Catcher Technology to establish at least a year's worth of agreement to enhance production capacity. The report claimed that if the deal would be realized, Luxshare could improve the quality of Cather's metal casing products and enable Luxshare to have a place in iPhone production. The said production ships around 200 million units every year.
An executive officer revealed that Taiwanese companies have dominated the contract electronic manufacturing industry for several years. Hence, he suggested that the more qualified suppliers Apple acquired, the more it would improve its bargaining power.
