Kirk Yang, President and CEO of Kirkland Capital, told CNBC’s “Squawk Box Asia” on Friday: “Chinese companies are becoming quite competitive for iPhone assemblers. China is doing pretty well in almost everything, except semiconductors.”
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Many mainland Chinese electronics manufacturing companies are set to take market share away from Taiwanese partners such as Foxconn and Pegatronsaid an investment fund manager.
Kirk Yang, President and CEO of Kirkland Capital, told CNBC: “Chinese companies are becoming quite competitive for iPhone assemblers. China is doing pretty well in almost everything, except for semiconductors”.Asian Squawk Box” Friday.
“So that’s why eventually, you will see more and more Chinese companies taking market share from Taiwanese electronics companies,” added Yang.
AppleFoxconn’s biggest supplier, also known as Hon Hai, is facing competition from China’s Luxshare, reportedly won a contract to produce high-end iPhone models in China.
That comes after Foxconn announced record unaudited revenue in 2022 and reported that Output at the iPhone factory in China has “basically returned to normal .”.”
Luxshare has produced a small number of iPhone 14 Pro Max models at the Con Son factory, Financial Times reportedwhen Foxconn’s Zhengzhou factory faced Covid restrictions and labor unrest last year.
Founded in 2004 by a former Foxconn worker, Luxshare manufactures connecting cables for iPhones and MacBooks, and also manufactures AirPods.
Yang added that with China-Taiwan geopolitical tensions, Taiwanese companies in the mainland have been under a lot of pressure over the past five years. “A lot of them are leaving China,” Yang said.
That’s why Apple has to diversify, he said, adding that the US-China tech war is also pushing companies to move faster out of mainland China.
Furthermore, Chinese companies like Luxshare have an advantage in Hong Kong, Yang said.
“They can hire people [more easily than non-Chinese companies] and get better tax incentives. After local companies learn to produce products of the same quality, at a cheaper price, they will gain market share.”
In mid-2021, Nikkei Asia reported that Mainland China overtakes Taiwan to become Apple’s largest supplier.
