Nexperia Parent Wingtech to Sell Electronics Arm Amid Geopolitical Shifts

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Wingtech (600745.SS), the Chinese company that owns European chip maker Nexperia, has announced plans to sell roughly half of its business, focusing more on chipmaking in response to changes in the geopolitical environment. This strategic move follows the company’s recent inclusion on the U.S. government’s “entity list,” which targets firms perceived to aid the Chinese government in acquiring sensitive chipmaking technology.

The sale will involve Wingtech’s “product integration” business, which includes contract manufacturing of smartphones, home appliances, and other electronics. Following the transaction, Wingtech intends to concentrate its efforts on strengthening its semiconductor division and solidifying its position as a leading global player in the power semiconductor sector.

The filing, submitted to the Shanghai Stock Exchange, did not disclose the price of the sale, but it revealed that the business to be sold accounts for between 50% and 60% of Wingtech’s revenues, although it represents no more than half of its total assets. Luxshare Ltd., a Hong Kong-based company that is also the controlling shareholder of Luxshare Precision Industry Co. (002475.SZ), an Apple supplier, will be the buyer of the business.

Nexperia, which Wingtech acquired in 2019, has stated that it does not anticipate any impact on its operations from being placed on the U.S. entity list, though they were not immediately available for comment on the sale.

 

As Musk Gains Influence, Questions Hover Over U.S. Probes into His Empire

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In the final days of the Biden administration, the U.S. Securities and Exchange Commission (SEC) gave Elon Musk a tight deadline to settle or face civil charges related to alleged securities violations during his $44 billion acquisition of Twitter in 2022. Musk broke the news on social media, posting a sarcastic comment aimed at SEC Chair Gary Gensler, questioning the motives behind the ultimatum and hinting at potential political influences.

The SEC is far from the only agency scrutinizing Musk’s business empire. Musk has long criticized government oversight, positioning himself as a victim of regulatory overreach hindering his companies’ innovations. With the imminent inauguration of Donald Trump, Musk’s influence over the U.S. government has raised concerns about how ongoing federal investigations into his companies—SpaceX, Tesla, and Neuralink—might be handled.

At least 20 investigations are reportedly ongoing into Musk’s companies, ranging from security violations related to Tesla’s Autopilot system to alleged animal-welfare violations at Neuralink. Despite these investigations, the approaching Trump administration has prompted questions about whether the probes might be dropped or sidelined due to Musk’s relationship with Trump.

Musk’s close ties with Trump are evident—he has called himself Trump’s “first buddy,” visited Trump’s Mar-a-Lago estate, and publicly supported his political appointments. Trump has even appointed Musk to co-lead a private advisory group on government efficiency, which Musk has said could help reshape national driverless-vehicle regulations to benefit Tesla.

Concerns Over Political Interference

The potential for political interference has become a topic of debate. While some experts suggest that prosecutors may still push forward with investigations if they have sufficient evidence, others argue that lower-level officials could avoid aggressive prosecution to appease the incoming administration. In particular, Trump’s DOJ appointments, many of whom have defended him in the past, could exercise discretion to protect Musk’s companies.

Tesla, SpaceX, and Neuralink have all faced their own legal hurdles. For Tesla, a DOJ investigation is looking into whether Musk and Tesla misled investors by exaggerating the self-driving capabilities of their vehicles. Meanwhile, SpaceX faces scrutiny over pollution and regulatory violations, with the Environmental Protection Agency (EPA) and the Federal Aviation Administration (FAA) taking action.

Despite this, SpaceX has largely avoided major regulatory challenges due to its extensive contracts with NASA and the U.S. government, which have outsourced much of the nation’s space exploration to Musk’s company.

Musk’s reported contacts with Russian President Vladimir Putin also raise concerns, but it is unlikely that the Trump administration will scrutinize these interactions, given Musk’s ties to the incoming administration and the fact that he has worked closely with Jared Isaacman, a tech entrepreneur who is now involved with NASA.

Ongoing Scrutiny and Potential Shifts

As Trump prepares to take office, the future of federal probes into Musk’s companies remains uncertain. While some experts downplay the risk of political interference, others warn that the shift in power could influence how aggressively the investigations move forward.

Apple Launches Rare iPhone Discounts in China to Counter Local Competition

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Apple is offering limited-time discounts of up to 500 yuan ($68.50) on its latest iPhone models in China, aiming to bolster its market share amid intensifying competition from domestic rivals like Huawei. The four-day promotion, running from January 4 to January 7, includes discounts on several iPhone models when purchased with specific payment methods.

The flagship iPhone 16 Pro and iPhone 16 Pro Max, priced at 7,999 yuan and 9,999 yuan, respectively, will see the largest discounts of 500 yuan. Meanwhile, the iPhone 16 and iPhone 16 Plus will receive a 400 yuan reduction.

Intensified Competition and Economic Pressures

The price cuts come at a time when consumer spending in China is cautious, impacted by the country’s slowing economy and deflationary pressures, with consumer inflation hitting a five-month low in November.

Apple has faced declining market share in China, the world’s largest smartphone market, where local manufacturers have stepped up their game. Huawei has been a particularly strong competitor, re-entering the premium smartphone market in August 2023 with locally-made chipsets. Huawei also slashed prices of its high-end devices, including smartphones, by up to 3,000 yuan over a recent weekend sale on one of China’s major e-commerce platforms.

Apple’s Struggles and Recovery

Apple briefly fell out of China’s top five smartphone vendors in Q2 2024, although it managed to recover by Q3. However, its smartphone sales in the region still declined by 0.3% year-over-year in Q3, while Huawei’s sales surged by 42%, according to research firm IDC.

In addition to iPhones, the promotion also offers discounts of 200 to 300 yuan on older iPhone models, as well as reductions on MacBook laptops and iPad tablets. Customers must use designated payment methods such as WeChat Pay or Alipay to qualify for the discounts.