After being included in the US trade blacklist for several weeks, Wingtech Technology, a supplier of Apple’s MacBook and iPad products in China, is eager to sell its business related to Apple and Samsung.
According to a report by Nikkei News on January 2nd, Wingtech Technology disclosed in a document filed with the Shenzhen Stock Exchange on December 31st that they have signed a letter of intent with Luxshare Precision to sell a total of nine subsidiaries along with their facilities and businesses for an undisclosed amount of cash. Luxshare Precision is a privately held company.
The businesses being sold cover the production of smartphones, tablets, laptops, and other electronic devices. Prior to this, Wingtech Technology has been trying to expand its influence in the Apple supply chain.
Wingtech Technology stated that the sale of non-semiconductor businesses and facilities is a strategic move to address “geopolitical changes” and meet the operational needs for future business development.
During Thursday’s trading session, Luxshare Precision’s stock price dropped by 1.52%, while Wingtech Technology’s stock price also fell by 0.64%.
On December 2nd, the United States took major actions against Chinese chip companies and chip equipment manufacturers, including adding 140 Chinese entities and their overseas entities to the Commerce Department’s blacklist, which includes Wingtech Technology. The US Commerce Department stated that Wingtech Technology, along with two major Chinese private equity firms – Wise Road Capital and JAC Capital, were added to the entity list because they were involved in assisting the Chinese Communist government in acquiring entities with sensitive semiconductor manufacturing capabilities, which are crucial to the defense industrial base of the United States and its allies.
Wingtech Technology is the second Apple supplier to be included in the US trade blacklist. In 2020, Chinese smartphone camera manufacturer O-Film Group was blacklisted by the US, resulting in its expulsion from the Apple supply chain in 2021. In 2022, O-Film Group was removed from the blacklist. According to a report by South China Morning Post on October 13, 2023, O-Film was a contractor for Huawei.
Although Wingtech Technology did not disclose the transaction amount, they mentioned that the revenue generated by these nine subsidiaries accounted for over 50% of their total sales in the quarter ending September 2024, amounting to more than 26.6 billion Chinese Yuan (approximately 3.64 billion US dollars).