“Chinese companies are getting quite competitive for iPhone engineers. China is doing pretty well in pretty much everything except semiconductors,” Kirk Yang, chairman and CEO of Kirkland Capital, told CNBC’s “Squawk Box Asia” on Friday.
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More mainland Chinese electronics manufacturers will take market share away from Taiwanese counterparts like Foxconn and Pegatronsaid an investment fund manager.
“Chinese companies are getting quite competitive for iPhone engineers. China is doing pretty well in pretty much everything except semiconductors,” Kirk Yang, chairman and CEO of Kirkland Capital, told CNBC’s “Squawk Box Asia” on Friday.
“So that’s why you’ll eventually see more and more Chinese companies taking market share away from Taiwanese electronic companies,” Yang added.
AppleFoxconn’s largest supplier, also known as Hon Hai, faces competition from China’s Luxshare, which has reportedly been awarded a contract to manufacture high-end iPhone models in China.
That comes after Foxconn posted unchecked record sales in 2022, reporting that production at its iPhone factory in China was “essentially back to normal.”
Luxshare has produced a small quantity of the iPhone 14 Pro Max model at its factory in Kunshan, the Financial Times reported, as Foxconn’s factory in Zhengzhou faced Covid restrictions and labor unrest last year.
Founded in 2004 by a former Foxconn employee, Luxshare makes connecting cables for the iPhone and MacBook and also produces AirPods.
Yang added that mainland Taiwanese companies have been under great pressure over the past five years due to geopolitical tensions between China and Taiwan. “A lot of them are leaving China,” Yang said.
That’s why Apple needs to diversify, he said, adding that the tech war between the US and China is also pushing companies to leave mainland China even more quickly.
In addition, Chinese companies like Luxshare have the advantage in Hong Kong, Yang said.
“They can probably hire people [more easily than non-Chinese companies] and get better tax benefits. After local companies learn how to make comparable quality products at a lower price, they will gain market share.”
In mid-2021, Nikkei Asia reported that mainland China had overtaken Taiwan to become Apple’s largest supplier.
