Apple plans to establish a new supply chain in the country: exclusively for iPhones in the Chinese market

DigiTimes released a report today highlighting that Apple is building a supply chain consisting entirely of Chinese manufacturers to produce iPhones specifically for the Chinese market.

This assessment is based on the recent moves by Apple suppliers Luxshare Precision and Lens Technology to actively acquire metal chassis factories operated by Taiwanese manufacturers in China.

Sources said that Luxshare Precision, the largest assembler of AirPods, joined the iPhone assembly chain by acquiring low-end iPhone production lines in China by joining Taiwan's Wistron. In order to further expand its business in the iPhone supply chain, Luxshare Precision has also been actively seeking to take over China's metal chassis factories from Taiwanese companies in the iPhone supply chain.

Taiwan-based metal chassis manufacturer Catcher Technology reportedly planned to sell a 30% stake in its Chinese factory to Luxshare Precision, but talks on the deal were halted after Luxshare Precision began negotiating with Pegatron subsidiary Kaisheng Holdings to buy its Chinese metal chassis factory.

Catcher Technology is also in talks with Chinese mobile phone cover glass maker Lens Technology to sell its Suzhou factory to the Chinese manufacturer, but the deal has hit a snag over the acquisition price, the sources said.

The move is understood to be part of Apple's efforts to recruit more Chinese suppliers who can provide low-cost components for iPhones in the Chinese market. Such deals are seen as part of Apple's broader plans to expand its overseas production base, and recent reports indicate that some Apple suppliers are actively seeking to set up production facilities in India.