A recent report from The Information reveals that tech giant Apple is increasing its reliance on Chinese supply chain partners and appears set to replace Taiwanese supplier Foxconn with Chinese supplier Luxshare as its primary manufacturer.
This news comes shortly after a report released earlier in December that Apple signed a $275 billion deal with the Chinese government in 2016 to invest in local companies. As part of the deal, Apple agreed to help Chinese firms build “the most advanced manufacturing technologies” and invest “many billions of dollars” in the country. The five-year agreement was designed to placate Chinese government officials who felt that Apple was failing to invest enough in the Chinese economy.
In 2016, Cook lobbied Chinese government officials over regulations that could threaten Apple services including the App Store, Apple Pay, and iCloud. Cook signed the deal with China during one of several visits to China that year after Chinese regulators' actions tanked iPhone sales in the country.
A memo of understanding was created by Apple's government affairs team in China alongside China's National Development and Reform Commission to improve the company's relations with Chinese leaders. Apple executives also made it a priority to meet with top Chinese government officials after the 2016 regulations affected iTunes books and movies.
Now, the Information has revealed some of the investments that Apple agreed to. One year after Apple signed the deal with the Chinese government, Apple began using Luxshare to manufacture its popular AirPod earbuds. This was a blow to the Taiwanese firms that had been the basis of Apple's assembly system for years.
Luxshare already exceeds Foxconn in market capitalization and could even unseat Foxconn as Apple's primary supplier. Foxconn is reportedly so worried about this that it has assembled a team to study Luxshare.
Read more at the Information here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address firstname.lastname@example.org