SHANGHAI (Reuters) – Shares of Luxshare Precision Industry Co Ltd, a supplier of Apple Inc, fell by 9.5% on Monday, amid new concerns over a patent infringement investigation filed against her in the United States.
On Sunday, in a lawsuit in the stock market, the company said it had been informed of two notices issued by the United States International Trade Commission (USITC) regarding a Section 337 investigation filed against it by the U.S. Amphenol Corp, alleging infringement of intellectual property.
Luxshare said it hired a team of lawyers to respond and “will follow the procedure” of the investigation, without giving further details, but reiterated that the case “will have no material impact” on its current operations and production.
Amphenol filed a section 337 complaint against Luxshare and its subsidiaries in December, alleging that certain electrical components imported into the United States from Luxshare infringe Amphenol’s patents for connector cables.
Days later, Luxshare issued a statement saying it learned of the complaint through the USITC website and added that it had established an internal working group to investigate the complaints.
Founded in 2004, Luxshare has in recent years become a fast-growing supplier to Apple. It has continually moved up the hardware giant’s value chain, from making connection cables for the iPhone and Macbook to making Airpods.
Last year, the company acquired two iPhone assembly plants from Wistron Corp.
This move has unnerved some executives at Foxconn, the dominant maker of the devices, and is seen by analysts as a sign that more indigenous Chinese companies are making deeper inroads into Apple’s supply chain.
Josh Horwitz reports; edition by Richard Pullin