Luxshare Precision Denies That Apple Cut Orders

News that Apple will cut manufacturing orders caused its major Chinese supplier Luxshare Precision’s stock price to fall on Wednesday. However, Luxshare clarified the situation in its latest announcement on Thursday morning, and the Financial Times reported that Apple will sign a new contract with the manufacturer to produce high-end iPhone models.

Some media outlets have reported recently that due to sluggish demand, Apple has asked its suppliers to reduce their production of parts for AirPods, MacBooks and Apple Watches in the first quarter of this year.

On the morning of January 5, Luxshare Precision issued an announcement in an attempt to clarify the situation, saying that the company recently noted a media report that “Apple asked suppliers to reduce production, and Luxshare Precision suffered the most.” At present, according to the announcement, cooperation between the company and existing customers is being carried out normally, and business is progressing normally and in an orderly manner as planned. There has been no remarkable change or impact to the related business of the company mentioned in the report, said the firm.

However, according to the Financial Times, people familiar with the matter said that Apple will sign a contract with Luxshare pertaining to the production of high-end iPhone models.

Previously, Luxshare’s Kunshan factory had been producing a small number of iPhone 14 Pro Max’s to make up for the production loss of Foxconn’s Zhengzhou factory last year.

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The FT commented that Luxshare Precision has been steadily winning more and more shares of Apple’s business, and the transfer of iPhone 14 Pro orders represents the successful expansion of the company’s business.

Previously, most of Apple’s iPhone 14 Pro and Pro Max were produced at the Foxconn factory in Zhengzhou. However, due to the repeated impact of a COVID-19 outbreak in Zhengzhou, Apple’s production in China was interrupted, and the output of iPhone Pro fell short of expectations.

For this reason, Apple wrote in a statement released in November, “We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models. However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products.”

Analysts also expect Apple to diversify its suppliers in the future. In December last year, UBS predicted that in order to meet the OEM demand for high-end models, Apple might require Pegatron and Luxshare Precision to produce more high-end models in the future.