Recent media reports have revealed a rare occurrence within the Apple supply chain. To secure mass production for the iPhone 18 Pro series, Apple reportedly asked its long-term optical lens supplier, Largan Precision, to increase orders for the series' variable aperture lenses. However, the request was politely declined. The report further indicated that the domestic optical leader, Sunny Optical, quickly stepped in to fill the gap, becoming the primary supplier for the variable aperture lenses on the iPhone 18 Pro and Max models. Consequently, Largan Precision has been relegated to a secondary supplier role, establishing a dual-supplier dynamic with Sunny Optical as the main provider.
This development is notable because the Apple supply chain typically operates under a logic where Apple holds a dominant position. As one of the most valuable clients in the global consumer electronics sector, an Apple order not only guarantees stable cash flow but also serves as an endorsement of a supplier's technical prowess and industry standing. Therefore, companies often prioritize Apple's demands absolutely, even if it requires significant upfront investment in capacity expansion and dedicated production lines. Numerous manufacturers have leveraged the benefits of being in the Apple supply chain to achieve rapid growth, transforming from unknown entities into industry leaders. For instance, Largan Precision experienced explosive growth in 2007 as the sole lens supplier for the original iPhone. It also served as the exclusive supplier for the dual-camera system on the iPhone 7 Plus in 2016. More recently, unverified market rumors about Han's Laser securing a major Apple 3D printing order sparked widespread industry discussion. In recent years, several consumer lithium battery laser equipment manufacturers have also reaped substantial financial rewards from bulk Apple orders. This pattern underscores how unusual it is for a supplier to refuse an additional order from Apple.
This raises the question: was Largan Precision's decision an emotional reaction or a rational choice based on industry trends, business value, and corporate strategy? According to related information, Largan Precision's stated reason is that the company currently wishes to avoid盲目扩产 blind capacity expansion. Instead, it plans to concentrate resources on a full-scale push into CPO (Co-Packaged Optics) technology, aiming to achieve mass production of new CPO products by the third quarter of this year.
From the perspectives of the hidden costs of Apple's additional order, the current state of the mobile phone lens business, and the value of the CPO sector, Largan's reasoning appears relatively sound. While Apple's orders are highly coveted, its recent supply chain strategy often requires suppliers to invest in production line upgrades and capacity expansion to accommodate increased orders. However, profit margins in the mobile phone lens business have been consistently squeezed in recent years. As the smartphone market has matured into a stage of competition for market share, the traditional mobile phone lens business is now characterized by this "存量博弈" or competition within a stagnant market. Although lenses continue to evolve towards higher megapixels, periscope zooms, free-form surfaces, and glass-plastic hybrids, these upgrades are primarily confined to high-end flagship models, offering limited impetus to the overall market size. Concurrently, competition among optical companies in the mobile phone lens sector has intensified. Accepting Apple's additional order would have necessitated significant resource allocation for expansion, potentially squeezing the resources available for new business ventures.
Beyond a clear understanding of the hidden risks associated with the order, Largan's refusal is fundamentally rooted in its optimism regarding the CPO sector. CPO is a novel photonic integration technology that co-packages key optical components like lasers, modulators, and optical receivers at the chip level. In simpler terms, it transitions optical modules and chips from working separately to collaborating closely on the same package, significantly shortening signal transmission paths and reducing latency, loss, and power consumption. It is considered a crucial optical solution in the era of exploding AI computing demand. With the surge in requirements for high-bandwidth, low-latency, and low-power optical interconnects driven by AI model training and data center construction, CPO is widely recognized as the next evolutionary step for silicon photonics. Data released by NVIDIA shows that adopting CPO can reduce power consumption per port from 30W to 9W, a decrease of approximately 70%, while improving overall performance by 3.5 times, signal integrity by 64 times, and deployment speed by about 30%. In an era where AI factories routinely involve hundreds of thousands of GPUs working in concert, such efficiency gains represent a significant competitive advantage. Driven by this strong industry logic, stocks related to the CPO concept have recently attracted substantial investor interest, with their prices rising steadily.
From an industry trend perspective, growth in traditional consumer optics is gradually slowing. Leading optical manufacturers are increasingly exploring new frontiers such as AI-related optics and automotive optics, making Largan's strategic choice part of a broader pattern. As the demand for AI computing power continues to rise, optical modules, as core components of the "computing foundation," are poised for a surge in market demand. CPO, being the anticipated next step in silicon photonics, has become a key battleground for leading companies. By concentrating resources on CPO R&D now, Largan aims to seize first-mover advantages and avoid being marginalized in the emerging AI optics era.
It is important to note that Largan's decision does not equate to "abandoning the mobile phone lens business" but rather reflects a stance of "avoiding盲目扩产 blind capacity expansion." By retaining a secondary supplier role for the iPhone 18 Pro series' variable aperture lenses, Largan maintains its relationship with Apple while mitigating the risks of over-investing in capacity. This approach achieves a balance between securing short-term revenue and pursuing a long-term strategy, demonstrating a discerning "know what to do and what not to do" philosophy. Observing the broader trends in the optical industry, when resource conflicts arise between traditional consumer businesses and promising frontier technology R&D, some suppliers with core technological capabilities are beginning to possess the confidence and rationale to make strategic choices.
Comments