China's Luxshare is poised to become the second largest iPhone assembler after acquiring a majority stake in Pegatron's Kunshan plant, reports Nikkei Asia.
Taiwan-based Pegatron, a longtime iPhone assembler, announced on Thursday that Luxshare will invest 2.1 billion yuan ($296 million) into the Kunshan plant as a capital expansion. As a result, Pegatron's stake in the facility will drop from 100% to 37.5% and it will lose control of it, the company said in a filing with the stock exchange.
Following the move, Luxshare becomes the second biggest iPhone assembler after Foxconn, deepening Apple's ties with Chinese suppliers.
"In response to the dynamic market and industrial environment, and to strengthen the regional manufacturing efficiency, Pegatron expects to reallocate resources more effectively by having a joint venture with the strategic investor through the capital injection, resulting in balanced regional deployment and stronger competitiveness," Pegatron told Nikkei Asia.
Sources tell the site that Pegatron needs the capital for its global manufacturing plans and does not intend to invest any more money into the Kunshan facility. Pegatron will keep its plants in Shanghai and India, and will continue to own the research and development teams for iPhone.
Pegatron has been expanding in India, Vietnam, Indonesia, and Mexico and will likely use freed up resources to accelerate expansion in these markets.
Luxshare has struggled to expand in India due to China-India tensions, so this deal helps it add needed manufacturing capacity. Notably, the company has puportedly been selected by Apple as the sole supplier of its upcoming Vision Pro mixed reality headset.
More details in the full report linked below...
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Taiwan-based Pegatron, a longtime iPhone assembler, announced on Thursday that Luxshare will invest 2.1 billion yuan ($296 million) into the Kunshan plant as a capital expansion. As a result, Pegatron's stake in the facility will drop from 100% to 37.5% and it will lose control of it, the company said in a filing with the stock exchange.
Following the move, Luxshare becomes the second biggest iPhone assembler after Foxconn, deepening Apple's ties with Chinese suppliers.
"In response to the dynamic market and industrial environment, and to strengthen the regional manufacturing efficiency, Pegatron expects to reallocate resources more effectively by having a joint venture with the strategic investor through the capital injection, resulting in balanced regional deployment and stronger competitiveness," Pegatron told Nikkei Asia.
Sources tell the site that Pegatron needs the capital for its global manufacturing plans and does not intend to invest any more money into the Kunshan facility. Pegatron will keep its plants in Shanghai and India, and will continue to own the research and development teams for iPhone.
Pegatron has been expanding in India, Vietnam, Indonesia, and Mexico and will likely use freed up resources to accelerate expansion in these markets.
Luxshare has struggled to expand in India due to China-India tensions, so this deal helps it add needed manufacturing capacity. Notably, the company has puportedly been selected by Apple as the sole supplier of its upcoming Vision Pro mixed reality headset.
More details in the full report linked below...
Read More