(Yicai Global) Dec. 24 -- Flex has sold its factory in Zhuhai, southeastern Guangdong province to Chinese electronic component firm Lingyi iTech after orders evaporated since the US electronics contract manufacturer severed ties with blacklisted telecoms giant Huawei Technologies.

LY iTech will pay CNY367 million (USD56.2 million) for the Zhuhai plant’s land and workshops, the Dongguan-based firm said yesterday. It will be used for product assembly to meet the rapid expansion of the company’s business in the Guangdong-Hong Kong-Macao Greater Bay Area, it said.

San Jose-based Flex began to scale down its partnership with Huawei, to which it was a key supplier of smartphone components, last May, after the Shenzhen-based company was added to the US’ so-called Entity List on national security concerns, barring US firms from buying its products and from selling it their hardware and software.

There were reports last July that in the subsequent fall-out Flex kept possession of CNY700 million (USD107.2 million) worth of Huawei's materials and equipment in its Chinese and overseas factories for over a month, causing great losses to the telecoms giant.

At the time, Huawei claimed Flex was over-interpreting US policies. It dropped Flex as a supplier and instead turned to Taiwan’s Hon Hai Precision Industry, also known as Foxconn, and Chinese electric car maker BYD.

It was a body blow from which Flex's China operations could not recover. Since then, its Zhuhai plant has shut down and its plant in Changsha, central Hunan province has been sold to Shenzhen-based BYD.

LY iTech, meanwhile, is expanding. Last June it bought Finnish electronics components maker Salcomp and became a supplier to US tech giant Apple among other big names. It logged a 31 percent fall in profit in the third quarter year on year to CNY1.4 billion (USD214 million) but revenue was up almost 20 percent to CNY19.5 billion.

Editor: Kim Taylor