Apple’s rising “star” rushed to sell off after being blacklisted by the US
According to Nikkei news agency, Wingtech, which has aggressively expanded its footprint in Apple’s supply chain in recent years, said it plans to sell its non-semiconductor assets to compatriot Luxshare, a large iPhone assembler. The deal will make Luxshare the first Chinese technology supplier to produce a comprehensive range of Apple products, including smartphones, wearables, computers and other devices.
The deal will also give Luxshare access to Samsung’s smartphone assembly operations for the first time.
Luxshare shares decreased 1.52%, while Wingtech’s share price also decreased 0.64% in the morning session of January 2, 2025.
Wingtech said in a filing with the Shenzhen stock exchange on Dec. 31 that it had signed a letter of intent with Luxshare, an unlisted company owned by Luxshare founder Precision Industry Grace. Wang and her brother – to sell a total of nine of their subsidiaries, facilities and businesses for an undisclosed sum of cash. Wingtech said the sale of its non-semiconductor related business and facilities was a strategic move in response to “geopolitical changes” and the need to grow its business in the future.
Wingtech’s sudden announcement comes weeks after the company was placed on Washington’s trade blacklist along with more than 140 Chinese entities on December 2. The US Department of Commerce said Wingtech, Wise Road Capital and JAC Capital were placed on the entity list for their involvement in supporting “the Chinese government’s efforts to acquire entities with quality manufacturing capabilities”. sensitive semiconductors critical to the defense industrial base” of the United States and its allies.
Wingtech is the second Apple supplier to be placed on Washington’s trade blacklist. Former iPhone camera module maker O-Film Tech was placed on the entity list for allegedly using forced labor in 2021.
“Luxshare is Wingtech’s best and fastest solution among Chinese competitors to take over the Apple business because the company has experience in manufacturing sophisticated systems such as the iPhone for many years,” an executive at an iPhone supplier told Nikkei Asia. “Luxshare’s takeover of Wingtech’s Apple business will help minimize risks for Apple when the continuity of the supply chain is affected,” this person added.
Wingtech, which owns chipmaker Nexperia, a subsidiary of NXP Semiconductors, said the transaction was unrelated to the company’s semiconductor business. The company will consolidate and focus on chip-related operations going forward, “to secure and enhance its position in the global power semiconductor industry.”
Although it did not disclose the amount of the transaction, Wingtech said revenue from nine subsidiaries accounted for more than 50%, or 26.6 billion yuan ($3.64 billion), but less than 60% of the total. sales in the third quarter of 2024.
Wingtech was founded in 2006 by Zhang Xuezheng, a former STMicroelectronics engineer. In addition to assembling Samsung smartphones, the company has actively expanded its presence in Apple’s supply chain in recent years. The company purchased camera module factories from O-Film in 2021 and subsequently secured orders for MacBooks and iPads. The company built a large manufacturing facility in China’s southwestern Yunnan province for Apple in 2022. Sources said the Chinese company produced about 2.5 million to 3 million MacBooks. in 2024.
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