Apple turns to Chinese suppliers for next iPhone

The tech giant bolsters its supply chain amid tensions between the US and China

Apple has chosen new Chinese suppliers to make key parts of its next iPhone, as the US continues to maintain trade restrictions against the country.

Luxshare Precision Industry will build up to 3% of the upcoming iPhone 13 series, taking business away from its Taiwanese rivals Foxconn and Pegatron, according to Nikkei Asia. Luxshare will reportedly begin building Apple's next flagship device, the iPhone 13 Pro, this month, work that is traditionally reserved for tried and tested suppliers.

South Korean camera module maker Cowell and metal frame maker Casetek of Taiwan, which were acquired by Luxshare last year, will also reportedly supply key components for this year’s new iPhone.

China’s biggest maker of smartphone camera lenses, Sunny Optical Technology, also reportedly entered the iPhone supply chain for the first time this year, supplying the tech giant with rear camera lenses.

"Although Luxshare only makes a small percentage of iPhones this year, we can't let our guard down," a senior executive at a rival iPhone supplier told Nikkei Asia. "If we don't strengthen our competitiveness, sooner or later they will be the major source."

A number of other Chinese companies appeared on Apple’s supplier list for the first time last year, such as display maker Tianma Micro-Electronics, memory chip maker GigaDevice Semiconductor, and Nexperia, owned by China’s biggest smartphone assembler, Wingtech. Nexperia acquired a Welsh semiconductor manufacturer last month, which immediately fell under review by prime minister Boris Johnson's national security advisor.

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Apple's supplier deals come at a time of increased tensions between the US and China, as the former seeks to make it easier for domestic companies to compete internationally.

In June, the US Senate passed legislation that was intended to boost the country’s ability to compete with Chinese technology. The measures included $190 billion to strengthen US technology and research and $54 billion for semiconductor and telecommunications equipment research.

In response to the legislation, China’s parliament expressed “strong indignation and resolute opposition” to the bill, saying it showed “paranoid delusion of wanting to be the only winner”. There were other provisions in the bill related to China too, such as banning TikTok from government devices, blocking the purchase of drones from the country’s government, and creating broad sanctions on Chinese entities engaged in US cyber attacks.

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