Leading Apple analyst Ming-Chi Kuo said the US iPhone manufacturer is expected to help Chinese company Luxshare set up production line in India, and Luxshare will benefit from the growth of the Indian market and supply chain in the coming years. He also said that Luxshare has got the new production introduction (NPI) for the high-end iPhone 16 model (Pro Max) while Foxconn did not.
“Investors are concerned that the geopolitical situation will not be favourable for Luxshare to set up production lines in India, which will impact future growth. However, my latest research suggests that Apple will negotiate with the Indian government to help Luxshare set up production lines in India with solutions such as a joint venture,” Kuo said in a medium blog post published on Thursday via MacRumors.
Based in Taiwan, the social influencer Kuo is an analyst at TF International Securities andshares observations and predictions of tech industry trends. “Luxshare expects to benefit from the establishment of a factory in India and a significant increase in profits from the iPhone business in the coming years,” he tweeted.
Foxconn spokesperson did not reply to a query on whether Apple was reducing its sourcing from Foxconn and giving preference to other vendors.
Luxshare, founded by a former employee of Foxconn, has a plant in Sunguvarchatram near Chennai for manufacturing cable assembly and connector systems. In 2021, it signed an MoU with Tamil Nadu government to invest ₹745 crore to make electronic components and wearables in Sriperumbudur, thus reviving the defunct Motorola factory.
In 2020, the AirPod supplier Luxshare became an iPhone assembler after acquiring two iPhone assembly plants from Wistron in China.
). This is the first time that Foxconn does not win the highest-level iPhone assembly NPI.
Luxshare’s iPhone business will see significant profit growth from second half of 2023, he predicted.
Based on experience with iPhone assembly, profits improve significantly once shipments exceed 30 million units per year. Luxshare expects to ship 45–50 million iPhones in 2023 (up from approximately 20 million in 2022), with the iPhone 15 Plus NPI already secured and the 15 and 15 Pro Max as a second supply.
Apple has transferred some iPhone 14 Pro Max orders to Luxshare for risk diversification after the Foxconn Zhengzhou incident in November 2022 which saw protests by workers. Luxshare’s production yield improvement schedule for the iPhone 14 Pro Max is better than expected, so the company has been awarded the iPhone 16 Pro Max assembly NPI for 2024. It means that Apple believes that Luxshare’s R&D and production capabilities have reached the level of first-tier suppliers. Luxshare’s iPhone business profit will also benefit from this improved capability.
The iPhone 16 assembly NPI for 2024 will be allocated to Luxshare (16 Pro Max), Foxconn (16 Pro and 16), and Pegatron (16 Plus). As a result, the unit price of iPhone shipments from Luxshare is expected to increase further. In addition, Luxshare’s vertical integration advantage will continue to expand and increase profits, as Luxshare will also benefit from Pegatron’s iPhone top module orders, Kuo said.