(Reuters) – Wireless connectivity chip maker Qorvo said on Monday it has reached a definitive agreement to sell its assembly and test facilities in Beijing and Dezhou in China to contract manufacturer Luxshare Precision Industry.
The transaction, the financial terms of which were not disclosed, is expected to close by the first half of 2024.
Upon closing, Luxshare will acquire each facility’s operations and assets, which include the property, plant and equipment, and the existing workforce, while Qorvo will continue to maintain its sales, engineering and customer support employees in China, the company added.
Luxshare will assemble and test products for Qorvo under a newly established long-term supply agreement, Qorvo said.
“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,” said Qorvo’s Chief Financial Officer Grant Brown.
The Beijing and Dezhou facilities primarily support Qorvo’s integrated advanced cellular products, the company said.
Qorvo counts Apple among its customers and has benefited from resilient demand for iPhones in China, despite growing restrictions on foreign technology in the country.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Krishna Chandra Eluri)
