Intel's China arm acquires minority stake in telecoms subsidiary of Apple supplier Luxshare

Intel's China arm has acquired a minority stake in the telecommunications subsidiary of Apple supplier Luxshare Precision Industry, according to business registry records, as the US semiconductor giant looks to navigate the geopolitical tensions between the world's two biggest economies.

Dongguan Luxshare Technology, a manufacturer of 5G-related products for data communications and wireless networks, has added Intel's China arm as one its shareholders with a 3 per cent stake, according to information published on Monday by Chinese corporate database Qichacha.

Shenzhen-based Luxshare Precision, also known as Luxshare-ICT, has a nearly 90 per cent shareholding in its telecoms subsidiary. Electronics contract manufacturer Luxshare Precision makes a range of Apple products, including iPhones, AirPods, the Apple Watch and mixed-reality headset Vision Pro.

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Intel and Luxshare Precision did not immediately respond to requests for comment on Tuesday.

The headquarters and main manufacturing facility of Dongguan Luxshare Technology is located at the Songshan Lake Hi-Tech Industry Development Zone in Dongguan, a city in southern Guangdong province. Photo: SCMP alt=The headquarters and main manufacturing facility of Dongguan Luxshare Technology is located at the Songshan Lake Hi-Tech Industry Development Zone in Dongguan, a city in southern Guangdong province. Photo: SCMP>

Intel's latest investment on the mainland, where the US firm set up its Shanghai-based subsidiary in 1985, reflects the company's efforts in driving the buildout of sophisticated data centres used for the development of artificial intelligence systems.

Intel recently unveiled its new Xeon 6 data-centre processors at Taiwan's Computex trade show, months after launching its Gaudi 3 chips for enterprise generative AI projects.

US tech sanctions, however, have led Intel to develop modified versions of its Gaudi accelerators, releasing the China-specific HL-328 and HL-388 chips with reduced capabilities to comply with Washington's export restrictions.

While China accounted for 27 per cent of its total revenue in 2023, Intel in May warned that its second-quarter revenue is expected to fall below the midpoint of previously guided range of US$12.5 billion to US$13.5 billion because of a new US ban on chip exports to Huawei Technologies. The US government in May revoked certain licences that allow Huawei to buy chips from Intel and Qualcomm.

Apple AirPods supplier Luxshare Precision Industry, also known as Luxshare-ICT, assembles mixed-reality headset Vision Pro. Photo: Shutterstock alt=Apple AirPods supplier Luxshare Precision Industry, also known as Luxshare-ICT, assembles mixed-reality headset Vision Pro. Photo: Shutterstock>

Established in 2017, Dongguan Luxshare counts Chinese tech giants Huawei and Lenovo Group as major clients, according to its website.

Telecoms products and components accounted for 6 per cent of Luxshare Precision's total revenue in 2023, which was up 13 per cent from the previous year, according to the firm's annual report

Shares of Luxshare Precision in Shenzhen closed 2.68 per cent higher to 37.99 yuan (US$5.23) on Tuesday.

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