According to an investment fund manager, more of the mainland Chinese enterprises that manufacture electronic goods are planning to make inroads into market share, much like their Taiwanese rivals, such as Foxconn and Pegatron.
Chinese businesses are becoming extremely competitive for iPhone assemblers. According to the chairman and CEO of Kirkland Capital, Kirk Yang, China is performing extremely well in every field except semiconductors.
Kirk Yang also added that this is the only reason why Chinese firms are backing out from Taiwanese electronic companies.
Chinese Luxshare, which reportedly won a contract to produce luxury iPhone models in China, is providing competition for Apple’s largest supplier, Foxconn, also known as Hon Hai.
The Financial Times reported Luxshare has been manufacturing a lesser amount of the iPhone 14 Pro Max model at its Kunshan plant as Foxconn’s Zhengzhou factory faced labor unrest and COVID restrictions last year.
Luxshare, which was founded in 2004 by a former Foxconn worker, makes connector cables for the MacBook and iPhone and also makes AirPods.
Yang said in an interview that Taiwanese companies on the mainland had seen a lot of pressure in the last five years due to China-Taiwan geopolitical tensions. It has been reported that a lot of them left China.
Further, he said that due to U.S.-China technological war is also encouraging businesses to from mainland China. This is where Apple has to diversify.
Yang said Luxshare has the Hong Kong advantage. They can possibly hire staff more easily than non-Chinese firms and get greater tax rebates.
After local firms in China know how to make products at a lower price without compromising the quality, they will be taking market share.