(Yicai) Oct. 12 -- Shares of Luxshare Precision Industry and Foxconn Industrial Internet fell despite the Chinese companies claiming the US International Trade Commission’s Section 337 investigation into their vertical power delivery systems and related computing devices will have a limited impact on their operations.

Luxshare [SHE: 002475] was trading down 2.1 percent at CNY46.60 (USD6.96), and Foxconn Industrial [SHA: 601138] dropped 4.9 percent to CNY53.30 as of lunch break today.

On Oct. 9, the USITC announced it initiated a Section 337 investigation into certain vertical power delivery systems, components thereof, and computing systems containing the same that alleged to infringe certain claims of the patent asserted by Vicor, based on a complaint filed by the US power module manufacturer. The USITC has not yet made any decision on the merits of the case.

The respondents in the investigation are 20 and include Luxshare, a leading Chinese supplier of high-end precision manufacturing and artificial intelligence device solutions, and its holding subsidiary Dongguan Luxshare Technology, as well as Hon Hai Precision Industry, the Taiwan-based Apple supplier better known as Foxconn, and its Chinese mainland-listed unit Foxconn Industrial.

Luxshare said on Oct. 10 that the products involved in the probe are primarily used in integrated power supply solutions for power modules and processors in data center applications and are still in the customer validation stage, so they have not yet achieved mass production.

The company expects that the investigation will not have a significant adverse impact on its production operations and financial performance, Luxshare noted, adding that it will actively respond to the investigation. However, it did not specify whether the probe will affect customer validation.

Foxconn said yesterday that Vicor accused it and three of its holding subsidiaries of infringing on a patent related to a vertical power delivery system. After an internal review, it confirmed that the products involved are in the internal validation and evaluation stage, so the investigation does not have a material impact on the company’s production, operations, or financial performance.

Foxconn will continue to monitor the progress of the case and carefully assess any potential impact, it pointed out.

Luxshare’s semiannual earnings report indicated that the firm scaled up production and shipment of DC-DC low-voltage server module power supplies and is actively developing high-voltage and ultra-high-voltage power supply solutions for high-power computing scenarios. Luxshare is seizing opportunities presented by the evolution of AI data center power supply architectures from 12V to 48/50/54V rack-level solutions and 800V high-voltage DC systems.

In the first half of the year, Luxshare’s revenue from the telecommunications and data center business surged 50 percent to CNY16.6 billion (USD2.5 billion) from a year earlier, accounting for about 9.5 percent of its total revenue, per the report. This business segment includes high-speed interconnection and thermal management.

Foxconn's business encompasses servers, data center equipment, and cloud computing. The company said it saw a significant increase in AI server shipments in the first half, but it did not disclose the revenue share or customer attribution for the products involved in the case.

Editor: Futura Costaglione