Luxshare Precision Denies Reports of Apple’s Production Cut

Technology Author: Yongqian Yang Jan 05, 2023 10:52 AM (GMT+8)

Analysts expect Apple to diversify its upstream suppliers in the future.


A piece of news from overseas media that Apple will cut production caused the Chinese Apple supply chain giant Luxshare Precision (Chinese: 立讯精密, 002475.SZ) to hit limit down on Wednesday. However, Luxshare Precision clarified the report in its latest announcement on Thursday morning. Additional news also claims that Apple will contract with Luxshare Precision to produce high-end iPhone models.

According to recent media reports, due to sluggish demand, Apple has asked its suppliers to reduce the production of components for the AirPods, MacBook, and Apple Watch series in the first quarter of this year.

On the morning of January 5, Luxshare Precision issued a clarification announcement stating that the company has noticed the recent media report in Taiwan, China claiming that "Apple has asked suppliers to reduce production, and Luxshare Precision has suffered the most." The announcement further stated that at present, the company's cooperation with existing customers is carried out normally, and the business is progressing in an orderly manner in accordance with the work plan. No special changes and impacts on the company's related businesses mentioned in the report are expected.

According to the Financial Times, citing people familiar with the matter, Apple will sign a contract with Luxshare Precision to produce high-end iPhone models.

Previously, Luxshare Precision's Kunshan factory had been producing a small number of iPhone 14 Pro Max to make up for the loss of production at Foxconn's Zhengzhou factory last year. 

Foreign media commented that Luxshare Precision has been steadily winning more and more Apple business shares, and the transfer of iPhone 14 Pro orders represents a successful expansion of the company's business.

Previously, the vast majority of Apple's iPhone 14 Pro and Pro Max were produced at Foxconn's Zhengzhou factory. However, as Foxconn's Zhengzhou factory repeatedly affected production due to the epidemic last year, Apple's production in China was temporarily interrupted, and the iPhone Pro production fell short of expectations.

In addition, a report released by the research organization TrendForce on the 28th pointed out that Foxconn has been the exclusive assembly of the high-end iPhone Pro series for many years, but this year, based on risk management and control, Apple has made Luxshare Precision one of the iPhone 15 Pro Max assembly supply chains.

At close on the 4th, Luxshare Precision reported CNY 28.37 per share, a drop of 9.99%, with a full-day turnover of CNY 5.27 billion and a total market value of CNY 201.8 billion.