Given China's strong government support for new energy technologies, and the fact that China has the biggest, fastest growing automotive market in the world, a plan by the joint venture between NXP and China's state-owned Datang Telecom Technology Co. to go after automotive is a no-brainer.
MADISON, Wis. — I suspect that I'm not alone in wondering when the fabless chip companies that have begun popping up in droves all over China in the last few years were going to awaken to markets other than the obviously overcrowded mobile space.
Well, lo and behold. Earlier this month, NXP Semiconductors N.V. announced the formation of a joint venture called Datang NXP Semiconductors Co. Ltd., with China's state-owned Datang Telecom Technology Co.
NXP calls the joint venture "China's first true, dedicated automotive chip company."
The JV will be a small, fabless startup, consisting of about 30 employees, headquartered in Nantong, close to Shanghai.
Datang NXP Semiconductors -- 51 percent owned by Datang and 49 percent by NXP -- will develop automotive chips for China's domestic and hybrid and electric car market, according to Drue Freeman, senior vice president for global automotive sales and marketing at NXP Semiconductors.
Given China's strong government support for new energy technologies, and the fact that China has the biggest, fastest growing automotive market in the world, the joint venture's plan to go after automotive is a no-brainer.
What makes the new JV notable is that it is founded to go after the hybrid and EV market. It will develop and sell advanced, application-specific, automotive ICs -- specifically in the area of "battery management and energy conversion" for EVs and hybrids, explained Freeman. It will do so by leveraging NXP's high-performance, mixed-signal technology. Under the agreement, NXP will transfer and license to the new JV certain IP rights in power management, including battery management, Freeman added.
Hybrids and EVs
It's important to point out, though, that NXP, despite its leading market share in China's automotive market, is not exactly known for its experience in developing chips for "green" vehicles.
NXP's automotive focus has always been on the "connected car" area, including chips for in-vehicle networking, in-vehicle entertainment, immobilizers, and more.
So, why is the new JV in China set up to go after the yet-to-blossom hybrid and EV market?