Huaqin's growing stake in Nexchip shows ODMs reaching upstream into chipmaking

Huaqin's increased stake in Nexchip signals a strategic move by ODMs into upstream chip manufacturing. Technologically, this integration could deepen the synergy between design and production, accelerating product development cycles and enhancing customization capabilities. From a compliance perspective, direct control over some capacity can mitigate risks associated with policy shifts, as global regulations on high-tech industries tighten. Competitors like Foxconn might respond by either following suit or strengthening ties with existing suppliers to maintain their competitive edge. Looking ahead, we anticipate that more electronics manufacturers will adopt this vertical integration approach over the next 12-24 months, aiming to bolster their positions within the supply chain.