Chinese Electronics Giant Accused of Buying Taiwan Tech Company

According to a report on September 1st, prosecutors in Taiwan accused the head of Luxshare Precision Industry Co., Ltd of using a shell company to secretly acquire a key local company, increasing the allegation of technology theft against companies in communist China.

In a reported copy of document, a prosecutor said in a court filing that Grace Wang, the chairman of Luxshare, used a Hong Kong company to mask her company’s identity and bought SpeedTech’s shares in 2012. The Taiwanese law prohibits companies of Chinese Communist Party (CCP) backgrounds from doing business in Taiwan without an approval from the local authorities.

U.S. agencies, including the FBI, have accused Beijing of encouraging people to steal technology which serves its own interests. Taipei sees the outflow of Silicon Valley engineers and technology to companies in mainland China as a critical national security issue, and it will begin to prohibit such companies from recruiting the top talents in sensitive fields such as chips.

In recent years, Luxshare has joined the exclusive club of the Global IPhone Assemblers, and it marks a dramatic shift to a 10-year-old production mode during the escalating tension between Washington and Beijing. It struck a deal to buy Wistron’s IPhone division and became the first Chinese company to assemble Apple’s large devices.

Luxshare is the largest of the fast-rising electronics companies in China, which are increasingly stealing Apple’s orders from the old companies such as Hon Hai Precision Industry Co., Ltd. Luxshare has become the world’s largest manufacturer of AirPod, one of the world’s best-selling consumer accessories before the Covid-19 pandemic and the global recession hit the demand for electronics.