Hong Kong IPO Faces "Roadblock" as Fourier Sued by Awei Electronics Over Patent Dispute, Industry Competition Escalates

Why did AI·Ewei Electronics initiate a patent lawsuit during Fourier’s IPO critical period?

Our reporter Zhao Yi from China Times (chinatimes.net.cn) reports from Shanghai

A patent lawsuit has cast a shadow over Fourier Semiconductor’s path to listing in Hong Kong.

Recently, Fourier Semiconductor passed the Hong Kong Stock Exchange’s listing hearing on March 15, and shortly after, became embroiled in a dispute over infringement of invention patents. According to official court information, Fourier and AI·Ewei Electronics (688798.SH) are scheduled for a court hearing on April 27. This could disrupt Fourier’s previously smooth IPO process.

On one side is the company preparing to ring the bell; on the other is an established listed company with years of industry experience. Their confrontation not only concerns the fate of one enterprise but also impacts the competitive landscape of the analog chip sector.

Regarding this lawsuit, reporters from Huaxia Times sent interview requests to both AI·Ewei Electronics and Fourier Semiconductor. As of press time, neither side has responded. The reporter then contacted the securities affairs department of AI·Ewei Electronics, which stated they could not comment without authorization and would forward the inquiry to the legal department. As of press time, no feedback has been received. Whether Fourier’s smooth IPO process can continue remains a focus of attention.

Sudden Change at the Final Moment of Listing

Looking back at Fourier Semiconductor’s listing process, on March 13, it received the China Securities Regulatory Commission’s (CSRC) filing notice for overseas issuance and listing. Just two days later, on March 15, the company successfully passed the hearing, with Guotai Junan International and Orient Securities International serving as joint sponsors, aiming to become Hong Kong’s “No. 1 AI audio chip stock.”

However, this rapid momentum was soon broken. According to official court information, AI·Ewei Electronics has filed a lawsuit against Fourier Semiconductor at the Shanghai Intellectual Property Court, alleging infringement of invention patents. The case number is (2025) Hu 73 Patent Civil Initial 195, and a hearing is scheduled for April 27 this year—just as Fourier Semiconductor approaches a critical sprint stage for its Hong Kong IPO.

“Encountering patent lawsuits just before an IPO is not uncommon in the semiconductor industry. It has become a routine non-market tactic for competitors to disrupt listing momentum and shake investor confidence,” said Sun Yuhao, senior partner at Shanghai Haihua Yongtai Law Firm, in an interview with Huaxia Times. According to Hong Kong listing rules, after passing the hearing, companies must fully disclose pending lawsuits that could have a significant adverse impact in the prospectus. This creates considerable uncertainty during Fourier’s roadshow and pricing window. The lawsuit could delay the listing process and also raise questions among investors about Fourier’s technological independence and ongoing operational capacity, potentially reshaping industry competition.

“If the lawsuit successfully blocks the competitor’s listing, the plaintiff will gain a valuable market window to consolidate its leading position,” Sun Yuhao added.

Founded in 2008, AI·Ewei Electronics went public on the STAR Market in August 2021. It is a leading domestic company in the analog chip field, adopting a Fabless model (focusing on chip R&D and design, outsourcing manufacturing). Its core products include audio power amplifiers and power management chips, with a broad customer base in consumer electronics and IoT sectors, including Huawei, Xiaomi, OPPO, vivo, Transsion, Samsung, and other major brands.

Financial data shows that AI·Ewei Electronics achieved a total revenue of 2.176 billion yuan and a net profit attributable to the parent of 276 million yuan in the first three quarters of 2025, representing year-over-year growth of 54.98%. Its operating cash flow reached 332 million yuan, demonstrating strong profitability and industry competitiveness. The company’s 2025 annual earnings report indicates full-year revenue of 2.854 billion yuan and net profit attributable to the parent of 316 million yuan.

Interestingly, AI·Ewei Electronics itself has experienced a “patent sniping” during its IPO process. In 2021, when rushing to list on the STAR Market, it was sued by competitor Chipsea Technologies for patent infringement. At that time, AI·Ewei Electronics successfully defended itself by invalidating the patents and counter-suing for commercial defamation, leading to a successful listing.

Wu Zewei, a special researcher at Shangshang Bank, told Huaxia Times that patent lawsuits before IPO are common in the semiconductor industry. Such lawsuits can impact the listing process, trigger regulatory inquiries, cause valuation fluctuations, and reduce investor confidence, even delaying the IPO. He explained that frequent patent disputes in the chip field stem from the technology-intensive, rapidly iterative nature of the industry, high R&D investment, and substantial patent barriers. Companies often use patent litigation as a strategic tool to protect core technologies, maintain market advantages, or curb competitors.

Fourier Faces Losses

Compared to AI·Ewei Electronics, Fourier Semiconductor, founded in 2016, also operates in the analog chip design industry with a Fabless model. Its main business involves designing and selling audio power amplifier chips and haptic feedback chips. According to a report by Frost & Sullivan, based on 2024 revenue, Fourier Semiconductor ranks fourth globally among audio power amplifier chip suppliers and third among Chinese suppliers.

In addition to some overlapping business areas, their downstream clients also partially overlap. According to the prospectus, Fourier’s mass production clients include Samsung, Xiaomi, vivo, Moto, Honor, and other major consumer electronics brands. This further intensifies the competitive tension between the two.

“Patents have become an ‘asymmetric weapon’ in market competition,” said Zhang Ronglin, deputy director of the Tax and Finance Department at Taihe Tai (Jinan) Law Firm, in an interview with Huaxia Times. He noted that the lawsuit between AI·Ewei and Fourier is highly representative. Both are core players in the audio chip niche, with highly overlapping product matrices. The timing of the lawsuit precisely coincides with the IPO window, reflecting a deeper shift in the domestic analog chip market from “incremental competition” to “stock game.”

Sun Yuhao pointed out that, according to the legislative spirit of the Patent Law of the People’s Republic of China, patent rights are a legal weapon for companies to protect core technological achievements and build competitive barriers. When the technological moat directly affects market share, patent litigation becomes the most direct tool for competition.

“For semiconductor companies, patent layout must adhere to a systematic strategy of ‘quantity and quality balanced, defense and offense coordinated.’ During R&D project initiation, they should introduce patent navigation mechanisms to identify technological gaps and infringement risks early. They should also protect core designs comprehensively under the ‘Regulations on the Protection of Layout Designs of Integrated Circuits.’ In risk prevention, companies should establish a ‘prevention-monitoring-response’ management system throughout the R&D lifecycle, regularly assess the stability of core patents, monitor competitors’ patent activities continuously, and negotiate FRAND terms for standard-essential patents to avoid passive situations. Before listing, proactive IP due diligence and FTO (Freedom to Operate) analyses should be conducted to resolve potential disputes early through settlement or invalidation, preventing legal attacks during critical capital market windows.”

Beyond patent lawsuits, Fourier Semiconductor remains unprofitable, which is also a common plight among domestic small- and medium-sized analog chip companies.

Financial data shows that Fourier’s revenue has surged in recent years, reaching 130 million yuan in 2022, 150 million yuan in 2023, and 355 million yuan in 2024. In the first ten months of 2025, revenue was 281 million yuan. However, net profits have been negative: a loss of 94.13 million yuan in 2023, reduced to 56.84 million yuan in 2024, and a loss of 51.77 million yuan in the first ten months of 2025. Although losses are narrowing, profitability has not yet been achieved. Gross margins for 2022-2024 and the first ten months of 2025 were 7.3%, -0.1%, 13.1%, and 20%, respectively.

Fourier attributes the gross margin improvement in 2024 mainly to economies of scale, a favorable shift toward higher-margin products, and reductions in unit costs due to scale, supplier bargaining power, and product upgrades. The further increase in gross margin in the first ten months of 2025 is also attributed to ongoing product mix optimization.

It is noteworthy that Fourier’s current loss situation reflects the difficulties faced by many small- and medium-sized domestic analog chip enterprises. The Chinese chip design industry currently has low concentration, and most small- and medium-sized companies must continuously increase R&D investment to break through technological barriers and capture market share, often remaining in a state of loss and highly dependent on capital markets. IPOs are a crucial way for them to achieve sustainable development. For Fourier, this patent lawsuit is both a crisis and a test. The outcome of this case and its IPO progress will continue to be followed by this newspaper.

Editor: Xu Yunqian Chief Editor: Gong Peijia