London Daily

Focus on the big picture.
Wednesday, Jul 23, 2025

Apple supplier Foxconn looks to counter a rising Chinese competitor

Apple supplier Foxconn looks to counter a rising Chinese competitor

Foxconn, the world’s largest electronics contract manufacturer, is increasingly wary of Chinese competitor Luxshare, which could eat into its business with Apple.

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.

The project was initiated by Foxconn’s founder Terry Gou, according to one of the sources, to target Dongguan-based Luxshare, which is little-known internationally but is poised to become the first mainland China-headquartered firm to assemble iPhones – a turf until now dominated by Taiwanese manufacturers.

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 per cent of Foxconn’s revenue – is supported by any Chinese government entity.

While the US-China trade war and the coronavirus crisis have intensified pressure on global supply chains, an increasingly acrimonious tech feud between the economic giants has also prompted Beijing to strengthen efforts on creating world-leading local tech firms – and Luxshare’s growth trajectory fits into that mould.

“Luxshare is set to rise … it’s just a matter of how fast it could be,” one of the sources said.

“It makes sense for China to build up its own supply chain and Luxshare is in line with that state policy.”

Red supply chain


That state policy, analysts say, is gaining traction with the rise of China’s “red supply chain”, where Chinese firms with apparent government support increasingly take on the work of manufacturing products for Apple and other global firms.

“Facing the rise of the red supply chain, the threat of Taiwan manufacturers being replaced continues to increase,” Market Intelligence & Consulting Institute, a think tank backed by Taiwan government, wrote in a September report.

Luxshare, whose chairwoman was once a worker at Taiwanese Apple supplier Foxlink, acquired two smaller factories belonging to Taiwanese iPhone assembler Wistron in China in July. Previously, Luxshare was best known for making Apple’s AirPods.

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.

Public records reveal that while Luxshare is majority-owned by Grace Wang and her brother Wang Laisheng, its minority shareholders include state-owned Chinese investment company Central Huijin Investment Ltd, which has a 1.38 per cent stake.

Luxshare has also received over 1 billion yuan (US$148.80 million) in government subsidies since 2016 to the first half of this year, a Reuters calculation of its financial reports shows. Roughly half of that sum came in 2019 alone.

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.”

“There have also been no other extraordinary actions taken by the management team.” It did not elaborate.

Luxshare declined to comment. Apple did not respond to a Reuters request for comment.

‘Blood in the water’


Luxshare was founded in 2004 by Grace Wang, who told Taiwan’s Business Today in July that she was once a worker at Foxlink, owned by Gou’s brother, T.C. Gou.

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.

The company’s revenue has risen in tandem with its advance up Apple’s value chain – sales in 2019 hit 62.5 billion yuan, up 75 per cent year-on-year.

That’s roughly 5 per cent of Foxconn’s revenue, formally called Hon Hai Precision Industry, although investor bets on the company’s prospects have lifted its market value to roughly US$20 billion above the Taiwan firm’s US$39 billion market capitalisation.

Luxshare now gets 58 per cent of its revenue from Apple, according to Morningstar Research

The company’s July acquisition of Wistron’s iPhone plants in Kunshan marks its most significant deal yet, which Fubon Research said could help Luxshare capture up to 30 per cent of iPhone production within the next five years.

Two of the sources familiar with Foxconn said Luxshare had also been actively poaching from Foxconn. In one case, one of the sources said, Luxshare offered 500,000 yuan (US$75,009) cash upfront as a relocation subsidy for a senior Foxconn employee to move family from Taiwan to China.

David Collins, a manufacturing consultant based in Taipei and Kunshan, says that Chinese firms see both Foxconn’s legacy status, coupled with its move away from China, as prime opportunity to usurp it.

“Foxconn’s share price is down roughly 50 per cent from two years ago. They see blood in the water.”

Comments

Oh ya 5 year ago
And after you get your first Huawei phone you will realize that there is no need to buy another apple, just like the Benz drivers found out when they bought their 1st Lexus. A nicer car at half the money

Newsletter

Related Articles

0:00
0:00
Close
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
×