US chip maker Qorvo to sell Chinese plants to iPhone assembler Luxshare in latest supply chain shift
US wireless connectivity chip company Qorvo has decided to sell two of its factories in China to a local company in the latest case of American tech firms scaling down their operations in the country.
Luxshare will take over the operations and assets, including the property, plant, equipment and existing workforce. Qorvo will maintain its teams of sales, engineering and customer support in China to continue serving customers, the company said. It did not specify the financial terms.
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The factories sold to Luxshare primarily handle Qorvo's advanced mobile phone products. Upon completion of the deal, expected in the first half of 2024, the two companies will enter into a long-term supply agreement under which Luxshare will assemble and test those products for the US chip firm.
The sale represents the latest example of changing global supply chains, as American tech companies are cutting reliance on China-based production facilities.
Established almost two decades ago as a computer cable assembler in China's southern Dongguan city, Luxshare has grown to become a key part of Apple's China manufacturing supply chain, tapped by the US firm to make more of its consumer electronics products.
A display at Qorvo's booth at CES in Las Vegas, January 7, 2023. Photo: Matt Haldane
Luxshare is currently the primary supplier for Apple's AirPods. It was also tapped to make iPhone 14 models following worker clashes at the Zhengzhou plant of Apple's main subcontractor Foxconn Technology Group late last year during the height of China's Covid-19 restrictions.
That incident resulted in delayed shipments of the iPhone 14 series at the start of the holiday shopping season, impacting Apple's revenues and contributing to the decision to shift more work to Luxshare, as well as accelerate the shift of production from China to Asian countries including Vietnam and India.
Qorvo also counts Apple as one of its main customers, with the US tech giant contributing around 37 per cent of the chip company's total revenue for its fiscal year ended April 2023.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.
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