After a year-and-half-long investigation, Taiwan prosecutors have charged 14 Luxshare employees with stealing secrets and poaching talent from competitors on the island.
Luxshare is Apple’s Chinese supplier which produces AirPods and parts for iPhone, iPad, and Macs for the tech giant. It was responsible for 3% of iPhone 13 production in Q1, 2021. Therefore, the Chinese manufacturer built a new iPhone factory to compete with other Apple suppliers like Foxconn and Pegatron. It was also reported that Luxshare has invested in electric vehicle manufacturing to build the Cupertino tech giant’s autonomous electric vehicle presumably called the Apple Car.
Luxshare accused of targeting Taiwanese competitors to “quickly enter the Apple production chain to win orders”
As part of its effort to prevent anticompetitive underhand and illegal activities by Chinese companies on the island, the Taiwanese Taipei government conducted an investigation against Chinese Luxshare Precision Industry Co Ltd and found that it targeted Taiwanese competitor Catcher Technology Co Ltd “in order to quickly enter the Apple production chain to win orders”.
Reuters reports that Luxshare poaches Catcher’s R&D team in China with promises of higher salaries to steal business secrets to “quickly build factories and mass produce cases for iPhones, iPads and other products”. The Taiwanese prosecutors said that Chinese manufacturers’ unethical actions caused Catcher big losses and have charged 14 people with breach of trust and taking commercial secrets for use overseas.
“The department will do its best to investigate such cases to maintain the sound development of our country’s enterprises and ensure the competitiveness of national industries.”
Catcher, which makes iPhone and iPad cases, said in a statement it continues to implement and optimise the protection of trade secrets and intellectual property rights, and will investigate anything that infringes on its rights and interests.
Apple itself takes such matters seriously. The tech giant has either cut ties or suspended operations of suppliers accused of illegal practices like employing forced labor, lacking transparency in mineral mining, not providing suitable working conditions, and others. Time will tell if the tech company will take any action against its Chinese partner.