Text/Dong Review/Zi Yang Proofreader/Zhi Qiu
In the recent period, Luxshare Precision can be described as the darling of the capital market. After the stock price experienced a long period of downturn, Luxun Precision began the model of "year-end performance", and the stock price rose sharply to usher in the highlight moment of the whole year.
Some time ago, the total market value of Luxun Precision was as high as 350 billion yuan. Even if the stock price of Lixun Precision has cooled down recently, it can basically hover around 340 billion yuan.
Luxun Precision invested 11 billion yuan to build a new plant
The reason why Luxshare Precision was able to usher in a big increase in stock prices, and at the end of the year, it was high-profile, stemming from the exposure of the news that Luxshare Precision was about to invest 11 billion yuan to build a new foundry.
On December 22, the Nikkei News agency said that Luxshare Precision was about to invest US$1.73 billion to build a new large-scale assembly plant in Kunshan, Jiangsu Province, China.
For Luxshare Precision's investment of 11 billion yuan to build a new factory, industry insiders interpreted that Luxun Precision wanted to better divide Foxconn and Pegatron's orders.
Although Luxun Precision has not responded positively to the news so far, a review of the previous series of behaviors of Luxun Precision's frequent investment in Kunshan can be inferred that the relevant news has a certain degree of authenticity.
If the news is familiar, once Luxun Precision can provide Apple with better foundry services with the construction of new factories, then the monopoly of Taiwanese companies such as Foxconn on Apple's foundry will be broken in one fell swoop.
Foxconn "out of favor"
As a global integrated technology leading enterprise, Apple has always occupied a considerable market share in the mobile phone, tablet and computer markets. For domestic and foreign oem manufacturers, it has always been proud to join Apple's OEM production chain.
The global foundry giant Foxconn has always been prominent among Apple foundry manufacturers, and is known as "Apple's royal foundry" in the industry.
But now, in order to break Foxconn's foundry monopoly, Apple has better dispersed the foundry orders for its related products and begun to support the development of other foundries. Luxshare Precision is one of them.
Previously, Luxshare Precision has begun to provide foundry business for Apple, but compared with the FOUNDC giant Foxconn FOUNDRy iPhone assembly business, Luxshare Precision's services for Foxconn stay on parts and wearable devices such as AirPods.
However, with the continuous rise of Luxshare Precision, after the acquisition of Weichuang in 2020, it began to focus on the business of OEM machines for Apple.
According to the author's understanding, in 2021, Luxun Precision has won more than 10 million OEM orders for Apple's new iPhone machines. According to the current development momentum of Luxshare Precision, Apple will provide more orders for it in the future, and Luxun Precision will also take advantage of this to surpass The Pegatron, a large foundry in Taiwan, and become Apple's second largest foundry.
Apple became the big winner
It is worth mentioning that the current Luxun Precision has made a breakthrough in the field of Apple's iPhone OEM, and Apple will also become a big winner from it.
Apple has been deliberately reducing its dependence on Foxconn. In Apple's view, putting eggs in the same basket will have a certain impact on the company's sustainable development, and the more spare tires, the more it can ensure the company's shipments.
Previously, the reason why Apple handed over most of its orders to Foxconn was because almost no company could achieve Foxconn's product quality at the foundry level. But now, the continuous rise of Luxshare Precision can meet Apple's requirements for product quality, and Apple will naturally tilt related orders to Luxshare Precision.
In addition, Foxconn's plan to build factories overseas did not meet Apple's expectations, affecting the supply of Apple's related orders, and also allowing Apple to see the instability behind Foxconn.
Of course, the confrontation and competition between Luxshare Precision and Foxconn will, to a certain extent, carry out an old-fashioned price war, and Apple will be able to get the greatest benefits from it.
Write at the end
For Luxshare Precision, although the iPhone OEM for Apple will promote the sustainable development of the company, it should also pay attention to the long-term layout and do not rely too much on Apple.