According to a report by Taiwan’s TechNews, Chinese electric vehicle giant BYD group announced on yesterday its intention to acquire the mobile electronics manufacturing business of American electronic contract manufacturer Jabil for nearly $2.2 billion in cash, encompassing operations in Chengdu and Wuxi, China. This move is widely interpreted as BYD’s strategy to infiltrate Apple’s supply chain, potentially encroaching on orders from Foxconn and Pegatron.

Notably, Jabil has been a significant supplier of iPhone components to Apple in the past. With BYD acquiring Jabil’s business in Chengdu and Wuxi, there’s speculation that BYD’s aim is to compete for orders from Foxconn and Pegatron. This development has again brought attention to the Apple supply chain dynamics.

In fact, recent times have seen frequent actions within the Apple supply chain landscape. Just last week, China’s Wingtec’s Kunming plant received the “3C Quality Certificate” for Apple’s M2 MacBook Air, indicating that, similar to the M1 MacBook Air, the M2 version will also be produced in China. Beyond BYD and Wingtec, Chinese companies like Luxshare Precision, GoerTek, and Tianma Microelectronics have made inroads into the Apple supply chain through various product avenues.

However, whether BYD’s acquisition of Jabil will significantly impact the volume of Apple orders for Taiwanese manufacturers remains to be observed. An industry insider shared insights with TechNews, suggesting that Jabil’s decision to sell its operations in Chengdu and Wuxi to BYD might be due to the increasing number of American companies relocating from China due to U.S.-China tensions.

Furthermore, there are rumors that Jabil is contemplating a corporate transformation, although the exact nature of this transformation remains unknown. Selling a portion of its business could potentially mark the first step in this transformation journey.

Additionally, while BYD is acquiring Jabil’s business in Chengdu and Wuxi for nearly $2.2 billion, this amount might not be substantial from a corporate perspective, implying that Jabil’s previous capacity offered might be considerably smaller than that of Taiwanese manufacturers.

The industry source also posits that BYD’s acquisition of Jabil’s business in China might simply signify BYD’s intention to venture into institutional component manufacturing, without necessarily indicating a shift towards producing Apple-related products in the end.

(Photo credit: BYD)

According to a report from Taiwan’s Commercial Times, the iPhone 15 series is slated to make its debut in mid-September. The closure of Foxconn’s Zhengzhou factory at the end of 2022, which caused disruptions in the shipment of iPhone 14, prompted Apple to not only divert orders to Pegatron but also actively support the Chinese factory Luxshare to become the second-largest assembly plant. It is projected that Luxshare will account for 28% of the iPhone 15 shipments.

With Apple’s backing, Luxshare has swiftly emerged as a potential rival to Foxconn in the assembly sector. Issues such as supply instability and employee departures arising from the closed management of Foxconn’s Zhengzhou facility led Apple to promptly shift 4 million iPhone 14 orders to Pegatron and shift their focus onto Luxshare. This expansion extended beyond mainland China, reaching into India as well.

The Commercial Times report mentioned that for the iPhone 15 series, Foxconn is expected to retain its position as the largest assembly factory. Analysts estimate that Foxconn will be responsible for around 58% of the production output. However, Luxshare is set to take on the assembly of the two lower-tier models, as well as a segment of assembly for the highest-tier model. This accomplishment propels Luxshare to become the second-largest assembly factory for the iPhone 15, holding a share of 28%. Additionally, Pegatron is expected to hold a share of approximately 13%, positioning itself as the third-largest assembly factory.

According to research conducted by TrendForce, Luxshare’s manufacturing proportion for the iPhone 15 and iPhone 15 Plus this year is expected to reach 29% and 65%, respectively. Furthermore, Luxshare has secured a considerable 35% of the manufacturing proportion for the highest-tier iPhone 15 Pro Max.

The report from the Commercial Times also highlights that Luxshare has rapidly evolved into a pivotal player in Apple’s supply chain. In addition to handling the assembly of the iPhone 15, Luxshare has taken on the entire assembly of Apple’s heavyweight new product, the Vision Pro, this year. Moreover, Luxshare has secured a remarkable 40% of the shipment volume for the Apple Watch, establishing itself as the world’s leading outsourced manufacturer of smartwatches.

According to Taiwan’s TechNews, Foxconn’s founder, Terry Gou, announced his candidacy for the 2024 presidential election. Responding to questions about how Foxconn is navigating pressure over its China-based investments, Gou emphasized that he has identified a successor and, if the Chinese Communist Party were to confiscate Foxconn’s assets due to disobedience, he would respond with a resolute “Yes! Do It!” Following his remarks, Foxconn swiftly issued a statement emphasizing the company’s collective ownership by global investors. Gou, who relinquished his managerial role four years ago, is not involved in current management.

The statement from Foxconn noted that this year marks the company’s 49th year of existence, during which it’s been contemplating the next 50 years. The group is committed to ongoing transformation and sustainable development. Foxconn’s core values of sharing, collaboration, and mutual prosperity are aimed at leveraging its global stature to contribute to the economic growth and quality job opportunities in the 24 regions it operates in. This commitment to enhancing human welfare, both in the past and the future, remains Foxconn’s primary contribution.

Foxconn is steadfast in promoting corporate governance, operational independence (with a majority of independent directors on its board), and diversity (including female directors, executives, and employees), aspiring to set a benchmark for professional management. While not participating in political activities, Foxconn is dedicated to advancing sustainable operations, ensuring the company’s enduring vitality. This ethos, part of Foxconn’s DNA, drives continuous progress and improvement. Over nearly five decades, it has brought transformative technology products to people’s lives. Looking ahead to the next 50 years, Foxconn seeks to innovate its operational model, offering products that revolutionize the way people live and move.

(Photo credit: Foxconn)

BYD Electronics has revealed a strategic move by entering into an acquisition framework agreement with independent third-party Jabil. The plan is to acquire a full 100% ownership of Juno Newco Target Company, with the transaction valued at around RMB 15.8 billion.

Juno, headquartered in Singapore, will become a part of BYD Electronics after the reorganization is finalized. This move will grant BYD Electronics control over the product manufacturing operations located in Chengdu and Wuxi. This includes the manufacturing of components for existing clients.

The BYD Electronics board views this acquisition as an opportunity to expand the group’s customer and product portfolio, further diversifying into the smartphone component sector. The acquisition is expected to significantly enhance the structural alignment of the group’s customers and products, thus propelling the group’s industry advancement and facilitating entry into a new phase of rapid growth.

(Photo credit: BYD Electronics)

NVIDIA Beats Expectations with Q2 Financial Results and Optimistic Q3 Outlook, But Overall Semiconductor Short-Term Prospects Remain Weak, According to Taiwan’s Central News Agency.

While the semiconductor industry remains subdued, NVIDIA stands out with robust operational performance and a positive outlook. The company reported Q2 revenue of $13.51 billion, an 88% increase from the previous quarter and double the figure from the same period last year. Net income reached $6.19 billion, translating to $2.48 per share. NVIDIA anticipates Q3 revenue to further reach around $16 billion, marking a 170% YoY increase.

According to research firm TrendForce, NVIDIA’s rapid data center business growth is the primary driver. In Q4 of the fiscal year 2022, data center revenue accounted for about 42.7% of the total, surpassing gaming. In Q1 of FY 2023, it exceeded 45%, and by Q2 of FY 2024, data center revenue reached $10.32 billion, a 141% increase from the previous quarter and a 171% YoY increase, making up more than 76% of total revenue.

TrendForce notes that AI server solutions are pivotal in propelling NVIDIA’s data center growth, including AI accelerator GPUs and AI server reference architecture like HGX.

Arisa Liu, a researcher and director at Taiwan Industry Economics Services, mentioned that NVIDIA’s outstanding performance underscores its solid leadership in the AI market. She emphasized that customer demand for AI-related solutions is consistently on the rise.

Liu also mentioned that NVIDIA’s supply chain is expected to benefit in tandem. Orders for TSMC’s 7nm, 4nm, and 3nm advanced processes might increase. Advanced packaging technologies like CoWoS are expected to remain in high demand. In addition, orders for silicon intellectual property, high-speed transmission components, power supply, PCBs, chassis, and server OEMs are likely to see growth.

However, Liu indicated that due to the relatively low share of the AI market, it cannot fully offset the impact of sluggish demand in major application markets such as computers, smartphones, and consumer electronics. As a result, the short-term semiconductor market conditions are expected to remain weak.

(Photo credit: NVIDIA)