TrendForce’s new report on iPhone 14 shipments states that Foxconn will not the exclusive manufacturer of iPhone 15 Pro Max models. Apple has brought its partner Luxshare to split the production volume of iPhone 15 Pro Max in 2023.
Apple’s iPhone assembling supply chain includes Foxconn, Luxshare, Wistron, Pegatron, and BOE. But, the Twainese manufacturer Foxconn (Hon Hai) has been Apple’s exclusive assembler for iPhone Pro models for years at its iPhone City in Zhengzhou, China.
Unfortunately, Foxconn faced several production issues this year which adversely impacted iPhone 14 Pro shipments. When the new COVID-19 wave broke out in China in March 2022, the country imposed nationwide lockdowns to prevent its spread including manufacturing hubs in Shanghai, Zhengzhou, and other provinces.
Although Foxconn began production at its iPhone plant in Zhengzhou under a closed-loop management system with up to 30% reduced production capacity by August, the manufacturer had a COVID-19 breakout at its Zhengzhou factory which led to workers rioting over unpaid bonuses and unsanitary living conditions and workers protests deteriorated the production capacity further.
Foxconn will not be the sole assembler for iPhone 15 Pro Max models in 2023
Because of production issues at Foxconn’s Zhengzhou factory in China, Apple confirmed a significant reduction in iPhone 14 Pro and iPhone 14 Pro Max for the Holiday season. Now, Apple is expanding iPhone production by adding Luxshare as the second EMS for the upcoming iPhone 15 Pro Max.
For years, Apple has outsourced the assembly of iPhone Pro models exclusively to Foxconn. However, due to the imperative of risk management, getting a second EMS provider for this task has been under consideration for some time as well.
Apple is reportedly to have made the plan of using another EMS provider besides Foxconn for the assembly of the iPhone 14 Pro models in near future.
Moreover, due to the recent outbreak at Zhengzhou, Apple has also made decision of employing Luxshare as one of the assemblers for the upcoming iPhone 15 Pro Max.
However, the report mentions that Luxshare’s solo iPhone assembly factory is also in China and has no plans to establish a new iPhone production line in Vietnam which might be a problem.
It is detailed that China is currently experiencing a labor shortage after the COVID-19 restrictions were lifted so it is likely that iPhone shipments could face a more than 20% Y-o-Y drop in Q1, 2023.
There are also signs that the labor shortage could get worse. Hence, on top of the various headwinds that are affecting the global economy, Apple is again facing a lack of manpower that constrains its device production. TrendForce has corrected down its forecast of iPhone shipments (including all existing models) in 1Q23 to 47 million units, with the corresponding YoY decline coming to 22%.