US patent infringement investigation on Apple supplier Luxshare Precision will have only limited impact on industry, experts said.
Shares in Apple supplier Luxshare Precision Industry Co fell on Monday after the US launched a patent infringement investigation against the company on January 21, just one day after the Biden administration took power
The move has led selling of related Apple supply chain shares and is seen by analysts as a continuation of a prior investigation rather than new crackdown measures against Chinese companies.
Luxshare Precision stock plunged as much as 9 percent on Monday morning and fell 3.97 percent to close at 55.21 yuan ($8.5) per share on Monday trading.
Affected by the investigation, shares of Apple's supply chain fluctuated on A-share market on Monday. The share of Goertek fell by 3.25 percent, the share price of Lingyizhi Manufacturing dropped 4.36 percent and Tanac Automation fell more than 8 percent.
In a filing issued on Sunday night Luxshare Precision said it had been informed of notices issued by the United States International Trade Commission (USITC) regarding a Section 337 investigation and the company will follow the 337 investigation process.
Luxshare Precision said it had hired a team of US lawyers to respond to the investigation and would follow the 337 investigation process and stressed that the case will not have a substantial impact on current production and operations.
It could take a long time for the case to involve and it is expected that patent issues will be resolved through litigation and will not have much impact on the Apple industry chain, Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times on Monday.
"If Luxshare faces huge penalty that force it to stop the supply of key component for Apple it will be a huge blow on Apple's entire ecology and a great loss to Apple and Luxshare Precision. Both companies will try to avoid such a situation," Xiang said.
The 337 investigation was requested of Amphenol Corporation, a US based producer of electronic and fiber optic connectors on December 18. Amphenol alleged that certain electric components and components from Luxshare Precision imported into and sold in the US have infringed its patent rights, according to media reports.
"Since the complaint was filed a month before Biden took office, it is too early to say it is a new attack against Chinese companies by the Biden administration," Xiang said.
Founded in 2004, Luxshare Precision has been a growing Apple supplier since 2012 making connector cables, wireless charging and straps for Apple Watch, and Airpods.