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Foxconn worries about Luxshare

by on26 October 2020


How a tiny company is a serious threat to dominance

Foxconn, has set up a task force to fend off the growing clout of Chinese electronics manufacturer Luxshare, which it believes poses a serious threat to its dominance.

Foxconn's founder Terry Gou wants to target Dongguan-based Luxshare which is poised to become the first mainland China-headquartered firm to assemble iPhones.

The task force, which the sources say was created last year, has been looking into Luxshare’s technology, expansion plan, hiring strategy and whether the company - which currently makes only five percent of Foxconn’s revenue - is supported by any Chinese government entity.

The China/ US trade war has forced Beijing to strengthen efforts on creating world-leading local tech firms - and Luxshare’s growth trajectory fits into that mould.
“Luxshare is set to rise ... it’s just a matter of how fast it could be”, one of the sources said.

“It makes sense for China to build up its own supply chain and Luxshare is in line with that state policy.”

Luxshare’s chairperson Grace Wang was once a worker at Taiwanese Apple supplier Foxlink and acquired two smaller factories belonging to Taiwanese iPhone assembler Wistron in China in July. Previously, Luxshare was best known for making Apple's AirPods.

One of the sources called it a “formidable opponent”, and said Foxconn has been conducting extensive research on Luxshare, aiming to “defeat it completely”.

Foxconn has denied this story, but it is well sourced. Two of the sources familiar with Foxconn said Luxshare had also been actively poaching from Foxconn. In one case, one of the sources said, Luxshare offered $75,009 cash upfront as a relocation subsidy for a senior Foxconn employee to move family from Taiwan to China.

Last modified on 26 October 2020
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