TAIPEI -- Is Foxconn about to be outfoxed?

The world's largest EMS/ODM has charged a new task force to study the growing competition from Luxshare, Reuters reported today, quoting three sources with knowledge of the development.

Reuters reported the investigation was launched by Foxconn founder Terry Gou after Luxshare, which is based in Dongguan, began making inroads to Apple's supply chain.

Luxshare has manufactured Apple's AirPods, but earlier this year extended its reach by spending more than $470 million to acquire a pair of factories in China from Wistron. Wistron, which is a major producer of iPhones along with Pegatron, Foxconn and Jabil, is said to be consolidating its production for Apple in Taiwan, India and Vietnam.

With China outwardly strategizing for larger domestically owned supply chains, the special Foxconn group has been tasked to detail Luxshare’s technical capabilities and business plans, including whether the Chinese government is helping to prop up the company.

Luxshare has a reported 5% share of Apple's manufacturing business, which is worth about 58% of Luxshare's revenue, Reuters reported. Founded in 2004, it has grown by acquiring suppliers of basic components to Apple, including connector cables.

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