Apple Inc is set to sign up Chinese contract manufacturer Luxshare Precision Industry Co Ltd to produce premium iPhone models, the Financial Times reported on Wednesday, citing sources familiar with the matter.

Luxshare has been producing small numbers of the iPhone 14 Pro Max at its Kunshan plant, to make up for lost production at Foxconn's Zhengzhou factory last year, the report added.

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

The iPhone maker and Luxshare did not immediately respond.

Analysts expected Apple to diversify its supplier base amid production disruptions in China due to employee unrest at a factory operated by Foxconn and COVID-19 induced lockdowns.

Foxconn, formally known as Hon Hai Precision Industry, and Pegatron Corp have so far held a dominant position in Apple's supply chain.

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

Wall Street expects Apple iPhone shipments to slip in the holiday quarter after Foxconn's plant in China's Zhengzhou city was heavily affected late last year after a COVID-19 outbreak and curbs taken to control the virus prompted thousands of workers to leave.

The Foxconn plant is almost back to full production, with its December shipments reaching about 90% of initial plans, sources told Reuters on Tuesday.

Industry research firm TrendForce said on Saturday that Apple decided to employ Luxshare as one of the assemblers for the upcoming iPhone 15 Pro Max.

TrendForce added that Luxshare's only iPhone assembly plant is located in China and it doesn't plan on setting up an iPhone production line at its Vietnam plant where it assembles Apple accessories.

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