CATCHER Technology Co., a key provider of metal frames for iPhones, has agreed to sell two businesses on the Chinese mainland to Shenzhen-listed Lens Technology Co.

Lens Technology will pay cash for the two units located in the eastern Chinese city of Taizhou and the transaction is expected to be completed before the end of this year pending government approval, Catcher said in a statement.

The deal is tentatively priced at US$1.43 billion and involves a plant that accounted for 40 percent of Catcher’s total sales in 2019, spokesman James Wu said at a briefing.

The U.S.-China trade war and increasing price competition is facilitating supply chain consolidation, Wu added. Catcher still maintains some operations on the mainland.

“Following iPhone assembler Pegatron’s acquisition of casing unit Casetek, Catcher is likely to lose its longtime partnership with Pegatron and lose market share within the Apple supply chain, so Catcher may be selling the plant to get some cash back,” GF Securities analyst Jeff Pu said, adding that the plant is responsible for assembling metal frames and glass backs of iPhones.

“For Lens Technology, buying this plant that provides preliminary assembly service may boost the company’s chance at winning iPhone and iPad assembly orders in the future.”

The U.S.-China rivalry has led to a growing bifurcation in the global tech industry, prompting firms to diversify their manufacturing bases away from the Chinese mainland.

Catcher’s move comes a month after fellow Taiwanese electronics assembler Wistron Corp. agreed to sell its iPhone production plant on the mainland to Shenzhen-listed Luxshare Precision Industry Co., paving the way for Apple Inc. to gain its first Chinese handset maker. (SD-Agencies)