NXP and JianGuang to Establish Power Semi JV in China

February 19, 2015 by Jeff Shepard

NXP Semiconductors N.V. and China state-owned investment company JianGuang Asset Management Co. Ltd. (JAC Capital) today announced that they have signed an agreement with the intention to establish a joint venture (JV) in China. The JV is intended to combine NXP's advanced technology from its Bipolar Power business line with JAC Capital's strong connections in the Chinese manufacturing network and distribution channels to lower manufacturing costs and boost profit margins of high end electronic products in China. The transaction is subject to the successful conclusion of the definitive agreements as well as the approval by relevant authorities, and is scheduled to close later this year.

The new JV will seek to capture the opportunities arising from China's growing demand for electronic products in the consumer, automotive, smart manufacturing and medical equipment sectors. Current Chinese government policies provide great incentives to the high tech sector, including semiconductors, which will accelerate the growth of the industry in the next few years.

The JV represents another step in NXP's strategy in China to strengthen ties with policy makers, customers and partners to better align with local guidelines and best business practice over the long term. JAC Capital's well established relationships with the Chinese government and finance industry will ensure successive injection of capital investment to support research and development for new products and market expansion in China and globally. Following regulatory approvals, the agreement will see JAC Capital owning a 51% stake in the JV and NXP taking the remaining 49% share.

"The Chinese electronics market has a great deal of potential and offers outstanding opportunities for NXP to further accelerate our business growth. We are seeing an increasing demand for high performance and high value added products and with this joint venture we will be in an even stronger position to address those needs," said Frans Scheper, executive vice president and general manager of the Standard Products business, NXP Semiconductors (NXPI). "We will greatly benefit from JAC Capital's government and industry network in China, and we will be able to gain further market reach as a genuine Chinese business, allowing us to provide the best possible customer support to our global customer base and offer the greatest competitive advantages."

"JAC Capital hopes to build a long term partnership with NXP and will bring in financial and industrial support to the JV to expand its semiconductor production market in China and worldwide," said William Sun, the general manager of JAC Capital. "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."