OFilm, AAC Technologies, Lens Technology, Compal, GoerTek, and others, have made great achievements because they entered Apple’s supply chain. After Chinese acoustic components company GoerTek received a large order for AirPods from Apple in 2018, its revenue more than tripled between 2019 and 2021. However, on the evening of November 8, the manufacturer issued a risk warning announcement implying that it was suspended from producing Apple AirPods Pro 2 products, which caused its share price to hit limit downs for two consecutive days.
This scene is familiar. In March 2021, Chinese optical electronics maker OFilm was kicked out of Apple’s supply chain, and its share price subsequently halved. So far the market value of the company has evaporated by 67%. Earlier, in 2018, Chinese audio solution provider AAC Technologies was also kicked out of the supplier pool by Apple, and its share price and performance both fell, with its share price shrinking by 90%.
An executive of one “Apple supply chain” enterprise once said that, in the industry, being recognized by Apple and receiving orders from the company is a good word for their performance. However, once out of the chain, enterprises are often abandoned by the stock market. Therefore, many Apple supply chain companies, including GoerTek, are trying to navigate the situation and extract themselves from their prior dependence on Apple’s favor by developing other independent businesses.
On the other hand, since 2022, the demand for consumer electronics devices has been weak, and the performance and market of some once brilliant consumer electronics companies this year have yet to recover. According to some market research institutions, as a brand, Apple’s sales performance of smartphones and smart watches is still strong, while the performance of listed companies of consumer electronics in Apple supply chain is uneven. This also urges these enterprises to find other business growth points.
Since 2012, GoerTek has begun to explore the AR/VR business, and in the last two years, GoerTek has accelerated its shift to the VR market. In 2020, GoerTek won the independent supply order of Meta Quest 2. Up to now, GoerTek has become the core foundry of VR manufacturers such as Meta and Pico, and its VR foundry market share is as high as 70%, which could make it the leader in the VR equipment foundry field.
Luxshare Precision, another Apple supplier and a Chinese connectors manufacturer, has developed from the connector supplier to provide TWS (True Wireless Stereo) wireless headset manufaturing service provider for Apple. After acquiring Taiwan-based electronics manufacturer Wistron, it entered Apple’s mobile phone assembly business. In 2022, it also cooperated strategically with Chinese carmaker Chery, and would form a joint venture with Chery New Energy, specializing in the R&D and manufacturing of new energy vehicles.
Chinese optical product maker Lens Technology acquired the ability to make metal structural parts by acquiring the Taizhou factory of Catcher Technology, which likely paved the way for its entering the Apple assembly business in the next step. At the same time, the company is actively expanding its automotive electronic business, and has improved the product line of automotive electronic glass and cooperated with new energy vehicle enterprises.
Chinese electronic components maker Suzhou Anjie Technology has also stepped into the automotive field, and the types of products supporting Tesla and the price amount of a single unit are increasing. Its supported models range from the Model 3 to Model Y, electric pickup trucks, electric trucks, and upgraded Models X and S. The company also participates in charging piles and energy walls. In addition, Anjie Technology has worked closely with Meta and Apple, and has supplied Oculus Quest 2 for mass production. It is also cooperating with Apple to develop AR products.
On the whole, Apple supply chain companies laid out around Apple’s industrial chain, and on the other hand, they are also exploring new consumer electronics businesses such as automotive electronics and XR to ensure future growth.