China-based glass cover maker Lens Technology, a supplier of Apple, has formed strategic partnerships with more than 20 automakers around the world, as it looks to diversify its business beyond mobile phone displays, according to the company.
With Apple shifting its supply chain to Southeast Asia due to the COVID-19 pandemic, AirPods Pro 2 reportedly will enter volume production in Vietnam in the second half of 2022. If that is the case, this will be an example of Apple mass-producing its flagship products outside of China, and it shows that the tech giant is adjusting its supply chain deployment strategy.
Apple, Xiaomi, Huawei, and other downstream brand vendors have successively announced their investments in smart vehicles in recent years. With Apple placing an increased focus on the automotive industry, its suppliers in China have also begun expanding their businesses beyond consumer electronics and into new energy vehicles (NEVs).
Lens, which specializes in developing new materials for smartphone applications, has a product line of glass cover, sapphire covers, ceramic panels, as well as metal and plastic accessories.
After it told investors recently that it has formed long-term strategic partnerships with over 20 automakers in China and overseas, industry sources suggested that Tesla, Bentley, Porsche, Mercedes-Benz, BMW, Hyundai Motor and NIO are among the automakers working with the company.
The sources said that Lens' main automotive products include control panels and chargers and that it will complete the construction of an automotive investment project at its production base in the Chinese city of Huanghua this year.
The sources also pointed out that Lens has begun mass-producing large-size 3D glass products, which were announced as part of an R&D project by the company in its 2021 annual report.
Besides Lens, China-based Apple suppliers Luxshare Precision, Everwin Precision Technology and Lingyi iTech also made their foray into the automotive market.
Luxshare chairperson Wang Laichun said that smart electric vehicles (EVs) are rare business opportunities for not only automakers but also first-tier players. While none of the world's four major first-tier suppliers (Bosch, Denso, ZF Friedrichshafen, and Magna International) are based in China, Wang expressed hope that Luxshare could capitalize on the smart EV trend to become a global leading first-tier player.
In February 2022, Luxshare signed a strategic cooperation agreement with Chery to form a joint venture for NEV development and manufacturing. In May 2022, Luxshare marked its official entry into the NEV manufacturing market at a car delivery ceremony held by Chery's subsidiary Exeed.
Meanwhile, Lingyi began deepening its deployments for NEV components at the end of 2020, and it officially cut into the NEV market in June 2021 after acquiring Zhejiang Jintai Electronic. The company announced two smart manufacturing and NEV component investment projects in May 2021, with a total planned investment of CNY 13 billion (US$1.9 billion).
Market observers said Apple supply chain players have the advantage of attracting industry attention after they enter the automotive industry. However, manufacturing of auto parts is different from that of smartphones, and it will take at least one to two years for these companies to establish a strong presence in the car market, the observers noted.