Chipmaker Qorvo to Sell Some China Facilities to Luxshare Precision Industry

Communications and power semiconductor company Qorvo Inc. has agreed to sell its assembly and test facilities in Beijing and Dezhou, China to Luxshare Precision Industry Co. Ltd. Qorvo will continue to be served through legacy contracts. The financial terms of the deal were not disclosed. 

Luxshare will acquire each facility’s assets, operations, and workforce and will assemble and test products for Qorvo under a long-term supply agreement. The Beijing and Dezhou facilities primarily support Qorvo’s highly integrated advanced cellular products. Qorvo said it will continue to maintain its sales, engineering, and customer support employees in China to continue serving customers. 

The Qorvo deal is expected to be completed in 1H24 subject to regulatory approvals and the satisfaction or waiver of other closing conditions. 

Luxshare is an electronic manufacturing services company in the style of Foxconn that has grabbed contracts in the Apple supply chain. It reportedly is an assembler of iPhones and AirPods and as of July 2023 was the initial and only contract manufacturer for Apple’s Vision Pro virtual reality headset. 

Bob Bruggeworth, CEO of Qorvo, said “The Beijing and Dezhou facilities have been an important part of our history and manufacturing network for decades. After carefully considering multiple alternatives over the past few years, we feel that we have found the right partner to continue supporting our customers from these factories. Given Luxshare’s scale and well-established, high-volume manufacturing competency, we are confident that they will ensure continuity, maintain high levels of quality, and be another outstanding strategic partner in our supply chain that allows us to serve our customers worldwide.” 

After the close Qorvo will continue to have assembly, packaging and test facilities in the US, Costa Rica, and Germany, as well as using outsourced semiconductor assembly and test (OSAT) partners.  

Luxshare Precision Expected to Deepen Ties in Apple’s Supply Chain 

Reportedly, to establish a presence in the Chinese Radio Frequency (RF) industry, Qorvo has set up facilities in Beijing and Dezhou, Shandong. The Dezhou facility is twice the size of the Beijing facility and is primarily engaged in the assembly, packaging, and testing of RF devices. 

The product range includes RF switches, multiplexers, tuners, amplifiers, and various other series. At the time of the public information available, the Dezhou facility was responsible for packaging 75% of Qorvo products and testing 85%-90% of Qorvo products. 

Now, Qorvo has decided to sell its Chinese factories, aiming to further reduce capital intensity, support the pursuit of long-term gross margin goals, and ensure continuity in serving Chinese customers. 

This move aligns with the current development trends, and in the future, Qorvo intends to achieve continuous market presence in China and improve profitability through the collaboration with Luxshare Precision