Luxshare Precision Industry will invest $ 926 million in metal case maker Pegatron, another Apple supplier.
|The Luxshare factory in Guangdong, China. (Photo: Nikkei)|
Luxshare I’m assembling the AirPods and the Apple Watch. In a stock filing submitted on January 28, Luxshare said it would buy a stake in Casetek Holdings, a subsidiary of Pegatron. Casetek produces metal frames and cases, an important part of the iPhone.
After this strategic investment, Luxshare will own 48% of Casetek. Casetek holds about 46% of the shares, and its employees and leaders have the right to buy the remaining shares. In addition, 3 out of 5 board seats also belong to Luxshare with the same right to appoint a new Chairman.
Source of Nikkei Disclosure: Under the agreement, Luxshare holds about two-thirds of Casetek’s assets and employees in China, including its largest factory in Jiashan, which handles all business with Apple.
This is the next move in a series of investments that Luxshare makes in key parts of the Apple supply chain. Working with an iPhone case maker will help Luxshare access important iPhone assembly knowledge and further strengthen its relationship with the US technology giant.
Last month, Luxshare bought about a 45% stake in iPhone camera module maker Cowell for $ 283 million, becoming the largest shareholder. Earlier, Luxshare bought Wistron’s iPhone assembly plant in Kunshan city for 3.3 billion yuan.
Pegatron said cooperation with Luxshare in the development of metal shell technology helps them better allocate global production resources. Pegatron Vice President Jason Cheng asserted that competitors can not only compete, but also collaborate with each other. He also said that the trend of restructuring the world supply chain in the midst of the US-China trade war is forcing suppliers to rethink and rebuild the supply chain to solve different markets.
Nikkei previously reported that Apple is accelerating the shifting production out of China for a number of key product lines, from iPhone, iPad to Mac, AirPods and HomePod mini.
In another filing on the stock exchange, Pegatron revealed that it would buy an industrial land in Tamil Nadu, India for $ 14 million. On January 27, the company announced the construction of a $ 74 million factory in Vietnam. In November 2020, Pegatron shared its first US investment plan, showing its efforts to diversify the global production site.
Foxconn and Pegatron dominate iPhone manufacturing, the most lucrative job in assembling Apple products. However, Luxshare is extremely determined to enter this field as quickly as possible, even sending a group of employees to the Wistron factory to study before the transaction closes. Many of Luxshare’s actions are consented by Apple.
Luxshare has long wanted to break into the chassis business. In 2020, the company wants to buy an iPhone case factory from Catcher Technology but fails. Later, Catcher Technology sold itself to Lens Technology, the partner that supplies Apple with glasses.
Du Lam(According to Nikkei)
Luxshare Vietnam sets a revenue target of 6.5 billion USD by 2021
This is the content shared by Luxshare ICT Company Limited (Vietnam) at the meeting with the Ministry of Information and Communications on the morning of January 27. Luxshare ICT is currently one of the leading technology products outsourcing and assembling enterprises in the world.