On the evening of October 10, Luxshare Precision Industry Co.,Ltd. (002475) issued an announcement responding to the Section 337 investigation launched by the U.S. International Trade Commission (ITC) on October 9 local time.
The investigation, numbered 337-TA-1526, involves certain vertical power delivery (VPD) systems, related components, and computing systems containing such systems. Luxshare Precision Industry Co.,Ltd. and its controlled subsidiary Dongguan Luxshare Technology Co., Ltd. were named as respondents.
The investigation was initiated by a complaint filed by U.S. power technology company Vicor Corporation on September 9, 2026, asserting patent US10,903,734. The ITC formally docketed the case on October 9, and it remains at an early stage with no substantive determination on the infringement claims.
In its announcement, Luxshare Precision Industry Co.,Ltd. stated that, based on its preliminary assessment, the products involved in the investigation are primarily integrated power delivery solutions for power modules and processors used in the data center sector. These products are currently in the customer validation stage and have not yet entered mass production. The company expects the investigation will not have a material adverse impact on its current production and operations or its financial performance for the current period.
The company also stated that it has immediately initiated research on the patents and related products involved, and is actively organizing technical, legal, and business teams to formulate specific response strategies and work plans, drawing on its experience from previous related cases.
Going forward, the company will actively respond to the litigation, continue advancing related patent technology analysis, product solution assessment, and necessary technical optimization, and strengthen communication with relevant customers and supply chain partners to ensure the orderly progress of related business.
The company noted that the Section 337 investigation is still at the docketing stage, and the outcome of the case remains uncertain. It advised investors to view cross-border intellectual property disputes rationally and to be mindful of investment risks.
According to publicly available ITC information, Vicor has previously initiated multiple Section 337 investigations against supply chain companies regarding data center power-related technologies. This case involves approximately 20 respondents, including Luxshare Precision Industry Co.,Ltd., Foxconn Industrial Internet, Delta Electronics, Quanta Computer, Infineon, Monolithic Power Systems (MPS), Flex, and Celestica, covering segments from chips and power modules to complete-system ODM.
The Respondent List Reflects the Global AI Power Competitive Landscape
Regarding this investigation, several market observers believe it is essentially a commercial patent dispute initiated proactively by a company, rather than an administrative sanction initiated by the U.S. government. Section 337 investigations are based on Section 337 of the U.S. Tariff Act of 1930, which governs unfair practices in import trade, with patent infringement being the most common category. Companies file petitions with the ITC, and the ITC adjudicates as a neutral arbiter.
Vicor has repeatedly used this mechanism in recent years with a relatively clear commercial purpose: leveraging market access as a bargaining chip to push power supply and server manufacturers adopting VPD architectures to obtain patent licenses and pay royalties, while constraining competitors' in-house solutions.
Notably, Luxshare Precision Industry Co.,Ltd. is a "new face" in this case. In the 337-TA-1370 case initiated by Vicor in 2023, Luxshare Precision Industry Co.,Ltd. was not on the respondent list; three years later, in the VPD case, it stands alongside global leading manufacturers such as Delta, Quanta, and Foxconn Industrial Internet.
Some market observers pointed out that the shift from being outside the list to being on it corresponds to the substantial scaling of Luxshare's data center business. The respondent list itself covers the complete global AI server power supply chain from chips and modules to complete-system ODM, which to some extent indicates that these manufacturers have developed the capability to compete head-on with Vicor in the North American AI data center market.
Market observers analyzed that Vicor's repeated initiation of similar investigations this year, conversely, suggests that Luxshare's VPD power products have reached a world-class level. The person also noted that Luxshare has prior experience responding to similar Section 337 investigations, and that this industry-wide Section 337 investigation by Vicor offers more room for maneuvering, adding that Luxshare's overall AI power business is well-positioned for volume growth next year and the year after.
Another market observer suggested that the respondent list itself is a "product competitiveness list." The only remedies available under Section 337 investigations are import exclusion orders and cease-and-desist orders, and Vicor's leverage is market access rather than monetary damages. As a newly named respondent, Luxshare's path choice — invalidity declaration, non-infringement defense, or licensing settlement — is the variable most worth tracking.
Still another market observer expressed the view that Vicor itself treats patent licensing as its core business model, and the ultimate outcome is most likely to be litigation defense or commercial settlement, essentially still aimed at collecting patent licensing fees.
Q3 Earnings Pre-Announcement Shows Growth, Overall Operations Remain Stable
From an operational perspective, Luxshare Precision Industry Co.,Ltd.'s fundamentals remain solid. In the first half of 2026, the company achieved operating revenue of RMB 174.504 billion, up 40.16% year-on-year; net profit attributable to shareholders was RMB 7.843 billion, up 18.04% year-on-year.
The profit growth rate was lower than the revenue growth rate, mainly due to a foreign exchange loss of RMB 1.986 billion from RMB appreciation, as well as front-loaded investment in AI, automotive, and globalized production capacity. The company hedged some risks through foreign exchange derivatives. Excluding the hedging gains included in non-recurring gains and losses, net profit attributable to shareholders excluding non-recurring items grew approximately 18.86% year-on-year, which better reflects the true operating results.
The company expects net profit attributable to shareholders for the first three quarters of 2026 to be between RMB 13.246 billion and RMB 14.398 billion, representing year-on-year growth of 15% to 25%. In its earnings forecast, the company stated that looking ahead to the first three quarters of 2026, it will continue to advance its established strategic layout, deepen customer cooperation around its three core businesses — consumer electronics, communications and data centers, and automotive electronics — accelerate the implementation of key projects, and maintain steady overall business development.
Facing external factors such as exchange rate fluctuations, raw material price changes, and continued investment in new businesses, the company is fully leveraging its globalized production capacity layout, vertical integration capabilities, and precision intelligent manufacturing platform advantages to continuously improve operational efficiency and supply chain coordination, effectively enhancing business resilience.
In the power management sector, Luxshare Precision Industry Co.,Ltd. recently stated in its investor relations activity record that its power management products have strong development momentum. Through continuous technological accumulation, the company has established full-chain power management product capabilities including DC-DC, AC-DC, high-voltage direct current, and SST.
DC-DC products have obtained design wins at multiple customers, building industry confidence and driving customer engagement opportunities for AC-DC, high-voltage direct current, and SST. Power Shelf products will enter mass production at core customers next year, marking a major breakthrough in AC-DC; DC-DC is expected to grow 2 to 5 times annually over the next three years; SST technology, upon launch, delivered stunning product performance and received high customer recognition, with mass production expected in two to three years.
Industry insiders believe that, overall, the Section 337 investigation will have limited impact on Luxshare Precision Industry Co.,Ltd.'s short-term performance, as the products involved have not yet entered mass production and the company has already initiated its defense and patent analysis. In the medium to long term, the case outcome may affect the path for its AI power products to enter the U.S. market, but being included alongside global leading manufacturers on the respondent list also reflects Luxshare's product competitiveness and competitive position in the AI server power sector.
Going forward, variables to track include the evidence exchange and preliminary ruling progress in the Section 337 investigation, Luxshare's defense strategy, and the pace of volume ramp-up for AI power and optical modules.
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