Intel’s China arm has acquired a minority stake in the telecommunications subsidiary of Apple supplier Luxshare Precision Industry, according to business registry records. This strategic move comes as the US semiconductor giant aims to navigate the ongoing geopolitical tensions between the US and China. Dongguan Luxshare Technology, known for manufacturing 5G-related products for data communications and wireless networks, now counts Intel’s China arm as a 3% shareholder, based on data from Chinese corporate database Qichacha.
Luxshare Precision, also known as Luxshare-ICT and based in Shenzhen, retains nearly 90% ownership of its telecoms subsidiary. Luxshare Precision is an electronics contract manufacturer producing a range of Apple products, including iPhones, AirPods, the Apple Watch, and the mixed-reality headset Vision Pro.
Neither Intel nor Luxshare Precision immediately responded to requests for comment. Intel’s investment in Dongguan Luxshare Technology aligns with its broader strategy to enhance the development of sophisticated data centers essential for artificial intelligence systems. Intel, which established its Shanghai-based subsidiary in 1985, recently introduced its new Xeon 6 data-center processors at Taiwan’s Computex trade show and launched the Gaudi 3 chips for enterprise generative AI projects.
Despite these advancements, US tech sanctions have forced Intel to modify its products to comply with export restrictions. This led to the creation of China-specific versions of its Gaudi accelerators, specifically the HL-328 and HL-388 chips, with reduced capabilities.
China accounted for 27% of Intel’s total revenue in 2023. However, Intel warned in May that its second-quarter revenue would fall below the midpoint of the projected range of $12.5 billion to $13.5 billion due to a new US ban on chip exports to Huawei Technologies. The US government also revoked certain licenses allowing Huawei to purchase chips from Intel and Qualcomm.
Established in 2017, Dongguan Luxshare lists major Chinese tech firms like Huawei and Lenovo Group among its significant clients. According to the firm’s website, telecoms products and components made up 6% of Luxshare Precision’s total revenue in 2023, marking a 13% increase from the previous year.
Intel’s latest investment highlights its efforts to strengthen its position in the Chinese market while complying with international regulations. This move is part of a broader strategy to drive innovation in AI and data center technologies, despite the challenging geopolitical landscape.
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