According to a report published in the Financial Times, Apple Inc is set to sign a contract with Chinese contract manufacturer Luxshare Precision Industry Co Ltd to produce premium iPhone models.

Luxshare has been producing small quantities of the iPhone 14 Pro Max at its Kunshan plant to compensate for lost production at Foxconn’s Zhengzhou plant last year, according to the report.

Luxshare, which was founded in 2004, became an Apple supplier in 2011 and has steadily moved up the value chain of the hardware giant, from making connector cables for the iPhone and Macbook to manufacturing Airpods.

Reuters’ requests for comment were not immediately responded to by Apple or Luxshare.

Analysts predicted that Apple would diversify its supplier base in the face of production disruptions in China caused by employee unrest at a Foxconn factory and COVID-19-induced lockdowns.

Foxconn, formerly known as Hon Hai Precision Industry, and Pegatron Corp have long dominated Apple’s supply chain.

Apple warned in November of lower shipments of its premium iPhone 14 models due to significant production cuts.

Wall Street expects Apple iPhone shipments to fall in the holiday quarter after Foxconn’s plant in China’s Zhengzhou city was heavily impacted late last year due to a COVID-19 outbreak and virus-control measures that forced thousands of workers to leave.

According to Reuters, the Foxconn plant is nearly back to full production, with December shipments reaching roughly 90% of initial projections.

According to industry research firm TrendForce, Apple has chosen Luxshare as one of the assemblers for the upcoming iPhone 15 Pro Max.

Luxshare’s sole iPhone assembly plant is in China, and the company has no plans to set up an iPhone production line at its Vietnam plant, where it assembles Apple accessories.

(Adapted from Reuters.com)