Jiaahe Smart invests in upstream chip firm Wuqi Micro

What's the deal? Jiaahe Smart (300793.SZ), a Chinese audio and smart device maker, disclosed on May 29 that it has made a strategic investment in Chongqing Wuqi Microelectronics Co., an upstream chip solution provider. The investment is aimed at securing core technology and components to support Jiaahe's product development and business expansion.

Why now? Chinese hardware companies are increasingly moving to lock in supply-chain partnerships amid ongoing uncertainty in the semiconductor sector. For Jiaahe, which reported a net loss of ¥155M in 2025 after previously being profitable, the deal signals an effort to strengthen competitiveness through vertical integration.

What could go wrong? Jiaahe's swing to a net loss raises questions about whether now is the right time to deploy capital into upstream investments. The company's controlling shareholder also recently signalled plans to reduce its stake by up to 1.59%, which could weigh on investor confidence.

The signal: The move fits a broader pattern of Chinese consumer electronics firms investing directly in chip-level suppliers to reduce reliance on external vendors and accelerate product cycles. As margins in finished-goods assembly tighten, owning — or at least influencing — the component layer is becoming a strategic imperative.

Read more: jiemian.com