Pegatron Corp (和碩), one of Apple Inc’s iPhone assemblers, yesterday said it is forfeiting control of a once fully owned subsidiary to Chinese rival Luxshare Precision Industry Co (立訊精密) in its latest effort to diversify its manufacturing sites geographically.
Its indirect share of Pegaglobe (Kunshan) Co Ltd (世碩電子) would drop to about 37.5 percent following the Chinese subsidiary’s latest share offerings, Pegatron said in a filing with the Taiwan Stock Exchange.
Luxsan Precision iTech (Kunshan) Co Ltd (立臻精密), a subsidiary of Luxshare, would subscribe to all of the new shares issued by Pegaglobe, which are worth 2.11 billion yuan (US$298.86 million), the filing said.
Pegaglobe has increased its registered shares to optimize its business as it braces for a rapidly changing industry environment and market conditions by forming a strategic partnership with Luxsan, Pegatron said in an e-mailed note.
The partnership would help Pegatron better utilize its resources and balance its global deployment, it said.
As Pagaglobe’s business model would remain intact, the deal would have limited impact on its operations, Pegatron said.
The firm said that it is diversifying its capacity geographically to provide as many options as possible for customers.
China remains its major manufacturing hub, with non-China capacity accounting for 15 percent, it said.
For Luxsan Precision iTech, the deal matches its strategy of boosting its smartphone assembling capacity to seek a bigger share of Apple Inc orders.
The Kunshan-based company in 2020 acquired two Wistron Corp (緯創) factories in China’s Jiangsu Province.
Wistron, which used to compete with Pegatron and Hon Hai Precision Industry Co (鴻海精密) for iPhone manufacturing orders, has disposed of its Chinese and Indian iPhone manufacturing capacity to focus on better-margin products such as artificial intelligence servers.
While Pegatron’s Chinese presence is shrinking, the company is expanding its manufacturing footprint in Vietnam.
In a separate filing yesterday, Pegatron said it plans to spend about NT$1.19 billion (US$38.74 million) to build new manufacturing facilities in Vietnam through its Pegatron Vietnam Co Ltd subsidiary.
Additionally, the firm would spend about NT$825 million to build employee dormitories in Vietnam, a separate filing said.
In Vietnam, Pegatron primarily makes consumer electronics such as smart speakers for Google, Surface laptops for Microsoft Corp and gaming consoles.
In Mexico, Pegatron makes electronic control units for vehicles, charging piles and components used in charging devices for a North American-based customer reported to be Tesla Inc.
The company also operates factories in India, Indonesia and the Czech Republic, it said.
Pegatron plans to spend US$300 million to US$350 million on new equipment and facilities this year.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the