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Apple Backing AirPods Assembler Luxshare’s Early Move Into iPhone 12 Production

Apple Backing AirPods Assembler Luxshare’s Early Move Into iPhone 12 Production

Apple is reportedly providing backing to AirPods assembly partner Luxshare’s attempt to get into iPhone manufacturing ahead of schedule. The move is aimed at relieving Apple’s reliance on Taiwanese rival Foxconn in the iPhone supply chain.

Luxshare was expected to get into the iPhone assembly end of things by producing older iPhone models, as well as Apple Watch devices. However, a Nikkei report today cites multiple sources that tell them that Luxshare is already looking at setting up iPhone 12 mini production at a Chinese plant the firm is purchasing from Wistron.

The plant is in charge of roughly 20% of total orders for the ‌iPhone 12‌ mini, two people with direct knowledge of the matter said.

“Luxshare is working with Wistron in making the latest ‌iPhone 12‌ mini in Kunshan. [But] its pace for reaching a satisfactory production performance is slow. There’s still a lot of room for Luxshare to learn,” an executive-level source familiar with the situation said.

This move is somewhat unusual, as the purchase of the factory is not yet final, and Apple is violating a long-standing policy of not allowing outside employees to visit manufacturing sites.

Luxshare purchased Wistron’s Phone‌ assembly plant in Kunshan, China, for $499 million in July. Wistron has made iPhones for Apple since 2015 and has plants in China and India. Apple reportedly asked Wistron to share some of its iPhone manufacturing expertise with Luxshare.

The move is likely connected to a report from earlier this week, saying Apple had suspended its partnership with China-based Pegatron after it was discovered that the iPhone supplier was committing labor violations. While the move isn’t expected to affect Pegatron’s current iPhone production, they could lose iPhone 12 orders to other companies, like Luxshare, in 2021.

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