Outflanking Foxconn? Luxshare Buys Wistron, Becoming Mainland's First iPhone Supplier
COVID-19 and China
A bigger Foxconn? Image credit: EqualOcean

Luxshare Precision (002475:SZ) said it is acquiring 100% equity of the Taiwan-based iPhone manufacturer Wistron Corporation's (3231:TW) assembly businesses Wistron (Jiangsu) Co., Ltd and Wistron (Kunshan) Co., Ltd. The deal is worth approximately USD 472 million. According to the source, Wistron’s business in Kunshan is the company’s only iPhone production base. The sale indicates Wistron is giving up Apple's (AAPL:NASDAQ) smartphone assembly base in China.

Since 2013, Luxshare has been closely working with Apple’s supply chain, making cables and connectors. In 2019, the company became the biggest manufacturer of Apple’s Airpods. The cooperation with Apple has brought Luxshare a rich margin and a soaring stock price. As a key supplier of Apple’s Airpods products, Luxshare Precision’s stock was one of the best performers in Asia Pacific in 2019.

The company's rapid growth is casting threats to Apple’s biggest supplier Foxconn (2317:TW). As of July 17, Luxshare's market value had reached CNY 369.5 billion, exceeding Foxconn's TWD 1.22 trillion. It also surpassed the market cap of Foxconn's Shanghai-listed subsidiary Foxconn Industrial Internet, at CNY 295.4 billion. Expanding the scope to iPhone manufacturing will possibly further drive Luxshare’s market value.

Editor: Luke Sheehan
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