Luxshare iPhone factory purchase is bad news for Foxconn, Pegatron

The sale of an iPhone factory owned by Wistron to Luxshare may be a long-term problem for rival Apple supply chain partners Hon Hai and Pegatron, JP Morgan reckons, with the purchase likely to help Wistron increase its involvement in iPhone production further.

Apple CEO Tim Cook visiting a Luxshare factory producing AirPods in 2017
On Friday, the board of directors for Wistron agreed to the sale of its iPhone factory in Kunshan, China, and two Chinese subsidiaries, in a deal estimated to cost in the region of $472 million. The purchase, which is anticipated to complete by the end of 2020 pending regulatory approval, is viewed by JP Morgan as a "mild negative" for Hon Hai and Pegatron in the long term.

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