More competition between Taiwan and China iPhone vendors, CEO says

“Chinese companies are becoming quite competitive for iPhone assemblers. China is doing pretty well in just about everything except semiconductors,” Kirk Yang, president and CEO of Kirkland Capital, told Reuters on Friday. CNBC’s “Squawk Box Asia”.

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More and more mainland Chinese electronics manufacturing companies are expected to steal market share from their Taiwanese counterparts such as foxcon and Pegatronsaid an investment fund manager.

“Chinese companies are becoming quite competitive for iPhone assemblers. China is doing pretty well in just about everything except semiconductors,” Kirk Yang, president and CEO of Kirkland Capital, told Reuters on Friday. CNBC’s “Squawk Box Asia”.

“That’s why, eventually, you’ll see more and more Chinese companies taking market share from Taiwanese electronics companies,” Yang added.

AppleFoxconn’s biggest supplier, also known as Hon Hai, faces competition from China’s Luxshare, which reportedly won a contract to produce high-end iPhone models in China.

It comes after Foxconn released record unaudited revenue in 2022 and reported that production at its iPhone factory in China was “basically back to normal”.

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Luxshare produced a small quantity of the iPhone 14 Pro Max model at its Kunshan factory, the Financial Times reported, as Foxconn’s Zhengzhou factory faced Covid restrictions and social unrest last year.

Founded in 2004 by a former Foxconn employee, Luxshare makes connection cables for the iPhone and MacBook, and also makes AirPods.

Yang added that with the China-Taiwanese geopolitical tensions, Taiwanese businesses on the mainland have come under a lot of pressure over the past five years. “A lot of them are leaving China,” Yang said.

That’s why Apple needs to diversify, he said, adding that the technology war between the United States and China is also prompting companies to leave mainland China even faster.

Additionally, Chinese companies such as Luxshare have the Hong Kong advantage, Yang said.

“They can probably hire people [more easily than non-Chinese companies] and obtain better tax incentives. Once local businesses learn to produce products of similar quality, at a lower price, they will take market share. ยป

In mid-2021, Nikkei Asia reported that mainland China had overtaken Taiwan to become Apple’s largest source of suppliers.

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