500-Billion-Yuan M&A Journey of Luxshare Precision Industry Co., Ltd.: From Apple's Supply Chain to OpenAI's Hardware Provider

Will the "Luxshare Model" become an upgraded example for Made in China?

When OpenAI spread the news in 2024 that it planned to enter the consumer - grade AI hardware market, the entire technology industry chain was speculating: Who would become the hardware partner of this AI giant?

Finally, the answer was revealed. Luxshare Precision Industry Co., Ltd. (Stock code: 002475.SZ) became the chosen one.

This company, which started by supplying connectors to Foxconn in its early days, not only won the assembly contract for at least one OpenAI device but also became a key helper for OpenAI to enter the hardware market.

Affected by this news, Luxshare Precision's stock price rose significantly in the past two trading days, and its market value is approaching 500 billion yuan.

From a contract manufacturer relying on giants to a core supplier in the AI hardware field, Luxshare Precision's "road to counter - attack" lies in every precise merger and acquisition layout in the past 15 years.

01# The "New Battlefield" of AI Hardware: Luxshare Precision Partners with OpenAI to Seize the 2026 Consumer - Grade Market

Luxshare Precision is gradually turning OpenAI's hardware ambitions into reality.

According to multiple sources, Luxshare Precision has signed an agreement with OpenAI to be responsible for the assembly of at least one consumer - grade AI hardware. Currently, the device is still in the prototype development stage. Its biggest highlight is the ability to collaborate deeply with OpenAI's artificial intelligence models to achieve environmental perception and new - type human - machine interaction.

However, OpenAI's hardware blueprint goes far beyond this. According to insiders, its planned product matrix is very rich, including not only smart speakers without displays but also smart glasses for portable interaction, digital voice recorders for efficient recording, and exquisitely designed wearable badges.

These "companion - type" AI devices are expected to be officially launched into the market from late 2026 to early 2027. Although Luxshare Precision has not responded directly to this cooperation, industry chain insiders have confirmed that OpenAI has carried out in - depth cooperation with domestic supply chains on specific projects.

It is not "accidental luck" that Luxshare Precision became OpenAI's partner. It is an inevitable result of its precision manufacturing capabilities, global production capacity layout, and industry chain integration strength accumulated through years of mergers and acquisitions. To understand this "inevitability," we need to look back at Luxshare Precision's history of merger and acquisition expansion from a contract manufacturer to an industry giant.

02# Increasing Investment in Consumer Electronics: From a Connector Contract Manufacturer to Apple's Supply Chain

Founded in 2004, Luxshare Precision was initially just a "small factory" focusing on computer connector manufacturing. Its core customer was Foxconn, and the gross profit margin of its initial contract manufacturing business remained in the range of 10% - 20% for a long time.

Going public in 2010 became a turning point for Luxshare to break the deadlock. It chose mergers and acquisitions as the key to open the door to high - end supply chains.

In December 2010, Luxshare Precision passed a board resolution to acquire 75% of the equity of Boshuo Technology for 168 million yuan. This was its first step out of the simple connector business and into the field of consumer electronics cables and connectors, laying a foundation for connecting with international large - scale customers.

Just half a year later, in April 2011, Luxshare acquired 60% of the equity of Kunshan Liantao Electronics. This acquisition directly brought it orders for Apple iPad connection cables.

Based on the above transactions, Luxshare's revenue in 2011 increased from 1.011 billion yuan in 2010 to 2.556 billion yuan, a year - on - year increase of 152.89%. It gradually entered Apple's industrial chain and completed a key leap from "relying on Foxconn" to "connecting with Apple."

After that, Luxshare began to systematically build technical capabilities and customer stickiness through mergers and acquisitions. In 2011, it acquired Hong Kong ICT - LANTO LIMITED, strengthening its high - speed data transmission technology and laying a foundation for undertaking more complex Apple orders in the future. In 2014, Luxshare Precision completed the acquisition of the remaining 40% equity of Kunshan Liantao, achieving full - scale control. This further consolidated its advantage in the connection cable business and made it a core supplier for Apple in this category.

Two investment and acquisition deals from 2015 to 2016 further promoted Luxshare's position in Apple's supply chain.

In 2015, Luxshare made a strategic investment of 800 million yuan in Merry Electronics, laying an important foundation for its acoustic business. In 2016, it followed up by acquiring 51% of the equity of Suzhou Meite, successfully entering Apple's acoustic component supply chain.

These two steps directly promoted the implementation of the company's AirPods orders in 2017. In that year, Luxshare Precision's revenue exceeded 22.826 billion yuan, a year - on - year increase of 65.86%, forming a virtuous cycle of "technology acquisition - order acquisition - scale growth." As the gross profit margin increased to 23.28% in 2014, the low - profit dilemma of early - stage contract manufacturing was gradually alleviated.

03# Deepening Vertical Integration: From Component Supplier to Whole - Machine Contract Manufacturer

After successfully establishing itself in Apple's supply chain, Luxshare Precision embarked on a path of vertical integration from components to whole - machines.

In 2017, Luxshare's subsidiary, Dongguan Luxshare, invested approximately 68.59 million yuan to acquire 51% of the equity of Huizhou Merry and Shanghai Merry respectively, further improving its production capacity layout in the acoustic field.

In the same year, based on Suzhou Meite, an Apple acoustic component supplier acquired in 2016, the company officially undertook the whole - machine contract manufacturing business of AirPods through technical integration and became a core supplier in 2019, with the product yield rate rising to the industry - leading level.

In July 2020, Luxshare Precision and its controlling shareholder, Luxshare Limited, jointly invested 3.3 billion yuan to fully acquire Jiangsu Wistron and Kunshan Wistron. Through this acquisition, Luxshare Precision successfully entered the iPhone contract manufacturing field and received partial orders for the iPhone 13 for the first time in 2021, achieving a key transformation from a parts supplier to a whole - machine assembler.

In December of the same year, Lijing Innovation, a subsidiary of Luxshare, acquired approximately 45% of the equity of Cowell E Holdings for nearly HK$2.2 billion, entering the camera module packaging field. This move further improved the company's overall layout in core consumer electronics businesses such as connection cables, acoustics, whole - machine contract manufacturing, and cameras.

In January 2021, Luxshare Precision acquired more than half of the equity (approximately 50.013%) of Nidec - Shinmeiwa for 6 billion yuan, successfully entering the iPhone metal middle - frame business. Relying on its technical accumulation in the metal structural parts field, Luxshare Precision further expanded its share in Apple's supply chain.

Through the virtuous cycle of technology - driven mergers and acquisitions leading to order acquisition and scale growth, Luxshare Precision has gradually developed into a global consumer electronics giant with revenue exceeding 150 billion yuan in 2021, with Apple - related business accounting for 70% of its total business, significantly enhancing its position in Apple's supply chain.

04# Layout in Automotive Electronics: From Consumer Electronics to Automotive Manufacturing, Mergers and Acquisitions Create a Second Growth Curve

After the consumer electronics business entered a stable growth period, Luxshare Precision turned its attention to the broader automotive electronics market.

In 2022, Luxshare Precision reached a strategic cooperation with Chery Group. Through this cooperation, Luxshare Precision obtained a R & D, design, and mass - production platform in the automotive manufacturing field, providing strong support for the development of its core automotive parts business.

In the same year, Luxshare Precision's subsidiary acquired approximately 74.67% of the equity of VTech Holdings. VTech Holdings focuses on interconnection products in industrial fields such as communications and healthcare. This acquisition helped Luxshare Precision diversify its customer structure and reduce its dependence on a single field.

In 2025, Luxshare Precision basically completed the acquisition of assets related to the consumer electronics system integration business of Wingtech Technology. Wingtech Technology has a mature R & D and manufacturing system in the ODM (Original Design Manufacturing) and OEM (Original Equipment Manufacturing) fields of consumer electronics system integration for mobile phones, tablets, laptops, and small household appliances, which is highly complementary to Luxshare Precision's precision manufacturing capabilities.

It can be seen that through a series of strategic layouts, Luxshare Precision plans to build its automotive business into a second growth curve after consumer electronics. Its goal is to become a top - tier global automotive parts supplier in the next three five - year periods, ultimately forming a development pattern driven by "consumer electronics + automotive electronics."

05# Global Balance: Building a Diverse Ecosystem

As its scale expanded, Luxshare Precision began to face two major challenges: "single - customer dependence" and "geopolitical risks." Mergers and acquisitions became the core means for it to optimize its business structure and build a global ecosystem.

In 2025, Luxshare Precision accelerated its layout for diversified customers. In addition to the acquisition of part of Wingtech Technology's business, in July of the same year, Luxshare Precision officially completed the transfer of the equity of Leoni Group and quickly introduced intelligent manufacturing technology. This integration not only brought automotive wiring harness technology and customers but also gave Luxshare Precision a global production network. From the mass production of Apple Watch in its Vietnam factory to the planned factory in Mexico, Luxshare Precision has built a triangular supply chain system of "China + Southeast Asia + Europe and America." This can avoid geopolitical risks, optimize the cost structure, and provide on - site production services for global customers.

As of 2025, Luxshare Precision's revenue is expected to exceed 300 billion yuan. From a "small contract manufacturing factory" when it went public in 2010, Luxshare Precision has grown into a global precision manufacturing giant spanning consumer electronics, automotive electronics, communications, and data centers.

Conclusion

From a connector contract manufacturer serving Foxconn to a core supplier assisting OpenAI to enter the AI hardware market, Luxshare Precision's growth history is a model for Chinese manufacturing enterprises to achieve leap - forward development through capital operation. Each of its mergers and acquisitions is not "blind expansion" but serves a clear strategic goal.

As emerging fields such as AI hardware and new - energy vehicles are developing rapidly, Luxshare Precision's "merger - integration - scale - up" model provides a reference for other domestic manufacturing enterprises.

When OpenAI's AI hardware is officially launched into the market in 2026, Luxshare Precision is expected to prove once again that a real manufacturing giant can not only play the role of a "contract manufacturer" but also become a "strategic partner" for technology giants to enter new markets.

This article is from the WeChat official account "Morning Whistle M&A" (ID: MW - Group). Author: Zhao Zihan. Republished by 36Kr with permission.