Qorvo to Sell Some Chinese Facilities to Luxshare

On the 18th of the local time, Qorvo, a prominent U.S. RF chip manufacturer, has officially announced a strategic agreement with Luxshare Precision Industry Co., Ltd. (Luxshare), a global advanced contract manufacturer. The agreement entails the acquisition by Luxshare of Qorvo's assembly operations and testing facilities located in Beijing and Dezhou, China.

The facilities, originally designed to support Qorvo's highly integrated advanced cellular products, form an integral part of the company's global manufacturing network. Qorvo specializes in producing RF chips for 5G base stations, smartphones, and various connected devices, with Apple being its largest customer, contributing 37% to the company's total revenue as of the fiscal year ending April 2023.

Upon the successful completion of the transaction, Luxshare will take over the operations and assets of each factory, including properties, buildings, equipment, and existing personnel. This move is aimed at ensuring a seamless transition and operational continuity. Luxshare will also undertake the assembly and testing of Qorvo products through a newly established long-term supply agreement.

As a trusted supplier for leading electronics companies globally, Luxshare is poised to enhance Qorvo's production capabilities, offering flexibility and top-notch manufacturing prowess.

The financial details of the transaction have not been disclosed by either party.

Bob Bruggeworth, President, and CEO of Qorvo, expressed, "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."

Grant Brown, CFO of Qorvo, commented, "This transaction furthers our efforts to reduce capital intensity while supporting our long-term gross margin objectives and ensuring continuity for our customers in China."

The completion of the deal remains subject to obtaining all necessary approvals from regulatory authorities, with both companies anticipating finalization in the first half of 2024. Until then, the Beijing and Dezhou facilities will continue to operate within Qorvo's global manufacturing network.