Apple provider Luxshare shares fall after U.S. patent infringement discover

SHANGHAI (Reuters) – Shares in Apple Inc (NASDAQ:) supplier Luxshare Precision Industry Co Ltd fell as much as 9.5% on Monday, amid fresh concerns about a patent infringement investigation filed against it from the United States.

On Sunday, in a stock market filing, 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 U.S.-based Amphenol Corp (NYSE:), alleging IP infringement.

Luxshare said it had hired a team of lawyers to respond and would “follow procedure” on the investigation, without elaborating, but re-iterated that the case “will not have a material impact” on its current operations and production.

Amphenol filed a section 337 complaint against Luxshare and its subsidiaries in December, alleging that certain electric components imported into the United States from Luxshare infringe on Amphenol’s patents for connector cables.

Days later, Luxshare issued a statement saying it had learned of the complaint via USITC’s website, and added it had established an internal working group to investigate the claims.

Founded in 2004, Luxshare has in recent years become a fast-rising supplier for Apple. It has steadily moved up the hardware giant’s value chain, from making connector cables for the iPhone and Macbook to manufacturing Airpods.

Last year the company acquired two iPhone assembly plant from Taiwan-based Wistron Corp.

That move unnerved some executives at Foxconn, the dominant maker of the handsets, and is seen by analysts as a sign of more indigenous Chinese companies making deeper inroads into Apple’s supply chain.

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