“Chinese gatherings are getting pretty competitive for iPhone assemblers. China is doing quite well in pretty much everything, except semiconductors,” Kirk Yang, chairman and CEO of Kirkland Brill, told CNBC’s “Squawk Box Asia” Friday.
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More mainland Chinese electronics mass production companies are set to take away market share from Taiwanese counterparts such as Foxconn and Pegatron, an investment pay for manager said.
“Chinese companies are getting pretty competitive for iPhone assemblers. China is doing quite fountain in pretty much everything, except semiconductors,” Kirk Yang, chairman and CEO of Kirkland Capital, told CNBC’s “Squawk Box Asia” Friday.
“So that’s why finally, you are going to see more and more Chinese companies taking market share away from Taiwanese electronic associates,” Yang added.
Apple‘s largest supplier Foxconn, also known as Hon Hai, is facing competition from China’s Luxshare, which was reportedly bestowed a contract to produce premium iPhone models in China.
That comes after Foxconn posted record unaudited profits in 2022 and reported that output at its iPhone plant in China had “basically returned to normal.”
Luxshare has been producing a small quantity of the iPhone 14 Pro Max model at its Kunshan gear, the Financial Times reported, as Foxconn’s Zhengzhou factory faced Covid restrictions and labor unrest last year.
Set up in 2004 by a former Foxconn worker, Luxshare makes connector cables for the iPhone and MacBook, and also manufactures AirPods.
Yang go on increased that with China-Taiwan geopolitical tensions, Taiwanese companies on the mainland have seen a lot of pressure in the last five years. “A lot of them are exciting out of China,” Yang said.
That’s why Apple has to diversify, he said, adding that the U.S.-China tech war is also prompting actors to move even faster out of mainland China.
Furthermore, Chinese companies such as Luxshare have the Hong Kong gain, Yang said.
“They can probably hire people [more easily than non-Chinese companies] and get better tax spurs. After local companies learn how to make products in a similar quality, at a cheaper price, they will be charming market share.”
In mid-2021, Nikkei Asia reported that mainland China overtook Taiwan to befit Apple’s biggest source of suppliers.
