Why is Apple supplier Luxshare Precision Industry stock sliding today?

Luxshare Precision Industry Co Ltd's stock declined by 2.1% to ¥46.6 on Monday after the company announced that it and its subsidiary were being investigated by the U.S. International Trade Commission Section 337 for potential patent infringement. The probe, initiated on October 9 at the request of Vicor Corp, centers around alleged violation of a patent for vertical power delivery systems, a technology vital to future AI data center infrastructure.

Luxshare sought to mitigate the impact by stating in a stock exchange filing that the affected products are still in the customer validation phase, have not entered mass production, and that the investigation is unlikely to have a significant impact on the company's operations or near-term financial results. The company also mentioned that it has assembled technical and legal teams to assess the patents and devise a response strategy.

Concurrently, Foxconn Industrial Internet and 18 other respondents were named in the same ITC complaint.