A flagship store of Xiaomi in Beijing, capital city of China Photo: VCG

China's leading electronic device manufacturer Xiaomi released a statement on Sunday, addressing online "rumors" regarding a Chinese chip company's association with Xiaomi. The chip company, Zunpai Communication Co, based in Nanjing, Jiangsu Province, is embroiled in an IP infringement case, the paper.cn reported.

Xiaomi stated that one of its subsidiaries, Hanxing Venture Capital, participated in a financing round for Zunpai in 2022, noting the financing as a normal investment decision by Xiaomi. The company added that multiple national and provincial development funds, as well as more than 20 investment bodies, participated in financing the chip company, read a posting by Xiaomi on its Weibo account.

Xiaomi is neither the earliest, nor the largest or the dominant investor in the chip firm, the company said. And, Xiaomi was not involved in direct management and operation of the chip company, and has no intellectual property or related technical cooperation with the chip company, according to the post.

"Xiaomi highly values intellectual property rights and firmly opposes any illegal way of stealing others' business secrets. The company also strongly condemns using distorted news reporting to mislead the public and damage the reputation of others through unfair competition," the post read. Xiaomi has gathered evidences and reported the false claims to the authorities, according to the post.

Shanghai police are probing a business secret infringement case, reportedly involving Zunpai Communication, arresting 14 suspects and seizing seven servers storing confidential chip technology, the Shanghai Municipal Public Security Bureau announced on Thursday. 

Zunpai was summoned before court for a pre-litigation asset preservation. The court requested Zunpai freeze 95-million-yuan ($13.3 million) in bank deposits and other properties with comparable value of the company and its branches and subsidiaries, in a case brought by Huawei's HiSilicon (Shanghai) Technologies CO, the Securities Times reported.

Established in March 2021, Zunpai Communication is a startup company focusing on Wi-Fi chip technology development, and it mainly produces Wi-Fi 6 chips used in terminal devices such as routers, mobile phones, tablets, and televisions.

Both Zhang Kun, the founder and CEO of Zunpai, and Zhou Yun, a senior staff, formerly had held key roles in Huawei's Hisilicon.

Within a year of its establishment, Zunpai Communication had raised financing of more than 300 million yuan, the company said on May 9, 2022.

A list of well-known funds and investors had participated in Zunpai's Pre-A round of financing, including Xiaomi Corporation, Allin Capital, FutureX Capital, Vision Knight Capital as well as Haiwang Capital and Anysoft Information Technology under Shanghai STVC Group, according to Zunpai's WeChat post.