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Semiconductors and Components

NXP Forms Chinese Automotive JV

02 December 2013

NXP Semiconductors NV (Eindhoven, The Netherlands), which claims to be the largest supplier of automotive chips into the Chinese market, has agreed to form a joint venture with state-owned Datang Telecom Technology Co. Ltd. (Beijing, China).

The company, called Datang NXP Semiconductors Co. Ltd., will be 51 percent owned by Datang and 49 percent owned by NXP. Headquartered in Nantong, near Shanghai, the fabless chip company will focus on the development and sale of chips for the Chinese hybrid and electric car market.

However, NXP did not indicate how much capitalization will be put into the company.

Even though NXP is the largest vendor of automotive chips into the Chinese market, the company has been persuaded to license certain intellectual property rights to the JV and transfer them to the JV. These are specifically in the area of power management, including battery management.

The company will develop high-performance mixed-signal application-specific automotive ICs and strengthen ties among NXP, Datang and political decision makers, NXP said, as well as with local customers.

"China continues to be the fastest-growing automotive market in the world, where NXP holds already today the number one position. This joint venture offers outstanding opportunities for NXP to further accelerate our business growth. We will greatly benefit from Datang Telecom's government and industry networks in China," said Kurt Sievers, executive vice president and general manager of NXP's automotive business unit, in a statement issued by NXP. "The JV will focus on new energy vehicle technologies, one of the top priorities in China's five-year government plan and a perfect complement to NXP's portfolio of semiconductor solutions for the smart connected car."

In the same statement, Cao Bin, president of Datang Telecom Technology Co. Ltd., commented: "Driven by strong government support, new energy technologies for the hybrid and electric car market industries in China are set to achieve strong growth. Design of integrated circuits is one of the company's [Datang's] core businesses. With this investment, we can now reach into the growing automotive semiconductor market in China and offer customers premier products and services through enhanced design capability."

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