Apple supplier Luxshare building new iPhone factory to challenge rivals Foxconn and Pegatron

Apple currently relies on Foxconn and Pegatron for the majority of its iPhone assembly. Out of the 200 million iPhones Apple ships annually, Foxconn assembles about 60% of the models, with Pegatron accounting for 30%. However, earlier this year, nearly one-third of companies Apple that added to its supply partners lists were located in China.

“I went on a business trip nearby and saw Luxshare’s new manufacturing complex. I am shocked by the scale of the complex and the possible capacity it could build for iPhones,” an Apple supplier executive told Nikkei Asia. “The day it threatens Foxconn and Pegatron might arrive earlier than people’s estimate judging from the progress of the new facility.”

An executive at another Apple supplier told the publication that although this has been the first year for Luxshare to build iPhones on its own, industry peers should not underestimate the company’s assembly performance.

The massive scale of the project is a sign of Apple’s growing reliance on Chinese suppliers – something the company has been criticized for. Several months ago, a group of U.S. lawmakers insisted that Apple exit the country due citing its compliance with the government’s authoritarian demands to remove apps from the Chinese App Store and staying silent on China’s human rights violations.