A quote from the CEO of Luxshare is firing up speculation that AirPods production will move to the US, but the scaffolding of the statement is too flimsy to hold the weight of the guesswork.
Despite Apple’s costs doubling and its valuation dropping by more than the entire value of Walmart, everything is fine because AirPods maker Luxshare is looking at moving to the US. This is the sign that firms will come to their senses and move manufacturing to America, and Apple will follow.
Only, it isn’t a sign at all, because this news is less about Luxshare and more revealing of how volatile, and frankly desperate, the situation has become for businesses. The market has been frantically responding to any good news, or at points even just rumors of potential good news some day.
In this case, Reuters — shockingly — reported only the answer to a question that was guaranteed to get a positive reply. The question was asked during a call with analysts, and if you have any kind of reading comprehension at all, you can tell that the answer was weakest possible statement, designed to make noise and actually say nothing at all.
This is what Luxshare chair Wang Laichun said when asked about moving manufacturing to the US:
“If there is a commercial guarantee and we are able to conduct a good evaluation, we do not rule out having some products being localized to meet the needs of the U.S. market. But for this step, we will also weigh some long-term development and safety considerations.”
Reuters also explicitly says that Luxshare is in talks with its customers on moving production outside China, including to the US. But it’s not clear how the publication has inferred this, as there are no actual quotes from Luxshare that say this.
Instead, the quotes are what any firm would say if asked about a move anywhere. Yes, sure, they would think about it, if the costs made sense and if they knew they could sell their products there.
The quotes very specifically do not say that Luxshare is already talking about a move to the US. Maybe it is, but it can’t be inferred from what its chair said.
And then one other thing that Reuters does not and cannot say is whether these alleged talks include any with Apple. It leads with how Luxshare is an Apple supplier, and the story is illustrated with a weirdly blurry photo of Apple AirPods, but the report does not back that up.
Instead, the report explicitly says that Luxshare did not identify Apple, or any other customers. And it does eventually note that as well as AirPods for Apple, Luxshare makes routers, wireless charging modules, and video conferencing equipment — for other companies.
It’s true that Luxshare is a significant Apple supplier, though, having chiefly built its way up from being a small cable manufacturer through acquiring companies or facilities. Chair Wang Laichun, also known as Grace Wang, has been vocal about how aiming to earn Apple orders has shaped her company.
“Apple’s stringent requirements have profoundly impacted Luxshare,” Wang said in 2017. “Over the years, we have closely followed Apple, and this alignment has propelled Luxshare towards growth and prosperity.”
Despite closely following Apple, Luxshare has absolutely zero manufacturing factories in the US whatsoever. It does maintain a primary office in Milpitas, California, about 20 minutes drive away from Apple Park.
There is not manufacturing there. There is no room for manufacturing on that land. It’s just an office.
We checked this morning. Luxshare has no other commercial holdings in the US suitable for a factory, anywhere. So, even if it wanted to move to the US, it would have to start by securing or leasing land.
And, that’s not the least of the costs involved.
How much it costs to move manufacturing to the US
The feds’ own work on factory construction suggests four to six years from ground-breaking to a factory opening. Other than that vague timeline, there is no one estimate for how long it takes to build a factory, but there are comparisons.
Apple processor supplier TSMC, for instance, has built a factory in Arizona, and will open a second one there. Even though it’s probably more relevant, we’ll ignore the Foxconn debacle in Wisconsin that’s ongoing seven years later for the sake of being on the side of an efficient move to production in the US.
TSMC announced that first plant in 2020 and it didn’t produce any chips in even small quantities until late 2024. Then its second plant, having learned from construction issues with the first one, was announced in 2022, and the latest news is that it should be operational by 2027. But more likely, in 2028.
With the opening of that factory still years away, it’s not possible to know what the final cost for the two facilities will be. But as of 2024, TSMC announced that it would spend $40 billion — on just that second plant alone. And that’s on top of CHIPS act funding.
Consequently, whether financially or just practically, there is currently no company for whom the best answer is to move to the US. Even if the labor and materials made it possible, at this moment there is such uncertainty and tariffs can change so quickly, that firms are pausing plans just to wait and see what happens.
No firm, however politely they don’t rule it out, will commit incredible resources to a move that could be made worthless by Trump’s next whim.
And in all likelihood, the next administration regardless of party will take a dim view to what’s been done too.
