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

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(Source: Huaxia Times)

This newspaper (chinatimes.net.cn) reporter Zhao Yi, Shanghai report

A patent lawsuit has cast a shadow over Fourier Semiconductor’s Hong Kong stock listing journey.

Recently, Fourier Semiconductor just passed the Hong Kong Stock Exchange’s listing hearing on March 15, but soon after, it became embroiled in a dispute over infringement of invention patents. According to official court information, Fourier’s lawsuit against Aiwei Electronics (688798.SH) is scheduled for a court hearing on April 27. Its originally smooth listing process may face uncertainties.

On one side is a company about to ring the bell for its IPO; on the other is an industry veteran listed company. The confrontation not only concerns the fate of one enterprise but also impacts the competitive landscape of the entire analog chip sector.

Regarding the issues related to this lawsuit, Huaxia Times reporters sent interview requests to both Aiwei Electronics and Fourier Semiconductor. As of press time, neither side has responded. The reporter then called Aiwei Electronics’ securities affairs department, which stated that without authorization, they could not comment on the matter and would forward the request to the legal department. However, as of this report, no feedback has been received. Whether Fourier’s smooth IPO process can continue remains a focus of attention.

Last-minute changes before listing

Looking back at Fourier Semiconductor’s listing process, on March 13, it received the China Securities Regulatory Commission’s approval 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 pace was soon disrupted. According to official court information, Aiwei Electronics has filed a lawsuit against Fourier Semiconductor at the Shanghai Intellectual Property Court, claiming infringement of invention patents. The case number is (2025) Hu 73 Zhi Min Chu 195, and a court date has been set for April 27 this year. This timing coincides with a critical phase of Fourier’s 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 used by competitors to disrupt listing schedules and shake investor confidence,” said Sun Yuhao, senior partner at Shanghai Haihua Yongtai Law Firm. According to Hong Kong Stock Exchange listing rules, after passing the hearing, companies must fully disclose pending lawsuits that could have a significant adverse impact in the prospectus. This introduces great uncertainty during Fourier’s roadshow and pricing window. The lawsuit could not only delay the listing but also raise doubts among investors about its technological independence and ongoing operational capabilities, potentially reshaping industry competition.

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

As the plaintiff in this case, Aiwei Electronics was founded in 2008 and listed 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 Aiwei Electronics achieved a total revenue of 2.176 billion yuan and a net profit attributable to shareholders of 276 million yuan in the first three quarters of 2025, representing year-on-year growth of 54.98%. Its operating cash flow reached 332 million yuan, demonstrating strong profitability and industry competitiveness. The company’s 2025 annual performance report indicates full-year revenue of 2.854 billion yuan and net profit of 316 million yuan.

Interestingly, Aiwei Electronics also experienced a “patent attack” during its IPO phase. In 2021, when rushing to list on the STAR Market, it was sued by competitor Chipsea Technologies for patent infringement. At that time, Aiwei Electronics successfully defended itself by invalidating the patent 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. Wu believes that frequent patent disputes in the chip field stem from the industry’s technological intensity, rapid iteration, high R&D investment, and high patent barriers. Companies often use patent litigation as a business strategy to protect core technologies, maintain market advantages, or curb competitors.

Fourier in Deep Loss

Compared to Aiwei Electronics, Fourier Semiconductor, founded in 2016, also operates in the analog chip design industry, using a Fabless model. Its core business involves designing and selling audio amplifier chips and tactile feedback chips. According to a report by Frost & Sullivan, based on 2024 revenue, Fourier Semiconductor ranks fourth globally among audio 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 customers 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. He told Huaxia Times that the lawsuit between Aiwei Electronics 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 China’s 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 technological moat directly affects market share, patent lawsuits become the most direct tool for competition.

“For semiconductor companies, patent layout must adhere to a balanced strategy of ‘quantity and quality, defense and offense,’” Sun said. “From the R&D project initiation stage, they should introduce patent navigation mechanisms to identify technological gaps and infringement risks early. They should also protect core designs through the ‘Integrated Circuit Layout Design Protection Regulations’ in a layered manner.” On risk prevention, companies should establish a ‘prevention-monitoring-response’ management system throughout the R&D lifecycle, regularly evaluate the stability of core patents, monitor competitors’ patent activities continuously, and establish FRAND negotiation mechanisms for standard-essential patents to avoid passive situations. Before listing, proactive intellectual property due diligence and FTO (Freedom to Operate) analysis should be conducted to resolve potential disputes early through settlement or invalidation, avoiding being targeted by legal weapons during critical capital market windows.

Besides patent lawsuits, Fourier Semiconductor has been operating at a loss since its establishment, and its profitability remains a concern.

Financial data shows that in recent years, Fourier’s revenue has grown explosively, 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 profit has 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.

Regarding the fluctuations in gross margin, Fourier states that the significant improvement in 2024 was mainly due to economies of scale, a favorable shift toward higher-margin products, and reductions in unit costs through supply chain 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 worth noting that Fourier’s current loss situation is a microcosm of the development difficulties faced by many domestic small- and medium-sized analog chip companies. The Chinese chip design industry currently has low concentration, and most small and medium enterprises must continuously increase R&D investment to break through technological barriers and gain market share, leading to long-term losses and high dependence 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 the case and its IPO progress will be closely watched by this newspaper.

Editor: Xu Yunqian Chief Editor: Gong Peijia