NXP said China plans to invest about $1.28 trillion over the next three years to modernize the nation's industry, with the aim of shifting from being "a big manufacturing country" to being "a powerful manufacturing country." NXP will act as Huawei's partner in chipset and secure connectivity as part of the Industry 4.0 transformation, the company said.
Industry 4.0 is a collective term being used to describe ideas of value chain cyber-physical connectivity and smart factory production including aspects of the Internet of Things (IoT). Connectedness is considered the fourth wave of industrialization coming after steam, electricity and information. The Huawei-NXP announcement was made at an Industry 4.0 Roundtable discussion held at the Hanover CeBIT exhibition (Hanover Consumer Electronics, Information and Communication Expo).
The two companies plan to create an open but secure platform for information and communication technology (ICT) for use in industrial automation. Security is considered one of the key attributes of such networks as alluded to by Infineon Technologies AG in its own recent Industry 4.0 announcement (see Infineon, Deutsche Telekom Team On Industrial Security).
Huawei already offers a wide range of ICT products appropriate to industry including LTE-M wireless modems, industrial Ethernet gateways and IoT connections, supporting applications ranging from automated production, energy utilization optimization, parts management, real-time fault diagnosis, and on-demand production.
NXP will collaborate with Huawei in the following areas, the company said: physical layer, network layer, and cybersecurity. Collaboration will focus on factory automation, logistics 4.0, secure wireless connections, and sensor networks. The plan is to create an Industry 4.0 platform for the Greater China region initially and potentially across the globe, NXP said in a statement.
NXP is building up a steady track record of collaborations and joint ventures in China. Datang NXP Semiconductors Co. Ltd. began operations in April 2014 supplying integrated circuits (ICs) to the automotive sector and addressing the electric and hybrid vehicle market in China, in-line with Chinese government emphasis on developing energy-efficient vehicles. In February 2015, NXP announced plans to form a power semiconductor joint venture with Chinese state-owned investment company Beijing JianGuang Asset Management Co. Ltd. (JAC Capital).
Patrick Zhang, the president of Huawei Marketing & Solutions, remarked that ICT infrastructure remains Huawei's long-term business focus. Li Zheng, senior vice president of NXP and CEO of NXP in China commented that, "By deeply collaborating with Huawei, we're able to offer industry-leading Industry 4.0 networking solutions and create sustainable value for customers."
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IHS Industrial Communications Research