NXP forms Chinese semiconductor JV with JAC Capital

JAC Capital will own a 51% stake in the JV while NXP will take the remaining 49% share. The JV is intended to make use of NXP's bipolar power technology and JAC Capital's connections with Chinese manufacturing and distribution channels to reduce costs and boost profit margins for high-end electronic products in China, NXP said in a statement.

Founded in 1953, NXP provides software solutions to mobile communication, consumer electronics, security application and others. It generated $5.65 billion in revenue in 2014, an increase of 17% year-on-year, while its profit increased 55% to $539 million.

The JV is being set up to meet China's growing demand for electronic products in the consumer, automotive, smart manufacturing and medical equipment sectors. The JAC Capital partnership ia expected to help NXP multiples rounds of capital investment to support R&D for new products and market expansion in China and globally.

Currently, the Chinese government is providing incentives to the high-tech sector, including semiconductors, in the hope of growing the industry rapidly over  the next few years, according to NXP.

"With NXP's leadership in the semiconductor industry and the strong government support through JAC Capital's partners, the future rapid development of the JV will be beneficial for both parties and greatly promote China's local industry and economy," said William Sun, the general manager of JAC Capital.

Beijing-based JAC Capital focuses on investing in high-tech industry including integrated circuit and semiconductor, IT and networking, data service, cloud computing and telecom, in order to support the industrial transformation strategy in China.

The deal is pending for regulatory approval, which is expected to close later this year.

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• Topics
• Greater China
• Technology
• China
• Joint Venture
• Technology