EINDHOVEN, Netherlands, Feb. 19, 2015 (GLOBE NEWSWIRE) -- NXP Semiconductors N.V. (Nasdaq:NXPI) 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. "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."
About JAC Capital
Beijing JianGuang Asset Management Co., LTD. (short as "JAC Capital") is a subsidiary of JIC Capital which is a state-owned investment group. JAC Capital was established for the purpose of investing in high TECH industry including Integrated Circuit and semiconductor, IT and Networking, Data service, Cloud Computing and Telecommunication. With the support from its financial institution shareholders and governments, JAC Capital partners with Chinese industrial leaders in various sectors and makes investments in the focused high TECH industry to support the continuous development of local economy and the industrial transformation strategy of China.
About NXP Semiconductors
NXP Semiconductors N.V. (Nasdaq:NXPI) creates solutions that enable Secure Connections for a Smarter World. Building on its expertise in High Performance Mixed Signal electronics, NXP is driving innovation in the application areas Connected Car, Security, Portable & Wearable and Internet of Things. NXP has operations in more than 25 countries, and posted revenue of $5.65 billion in 2014. Find out more at nxp.com.
Forward-looking Statements
This document includes forward-looking statements which include statements regarding NXP's business strategy, financial condition, results of operations and market data, as well as other statements that are not historical facts. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements. Except for any ongoing obligation to disclose material information as required by the United States federal securities laws, NXP does not have any intention or obligation to publicly update or revise any forward-looking statements after NXP distributes this document, whether to reflect any future events or circumstances or otherwise. For a discussion of potential risks and uncertainties, please refer to the risk factors listed in NXP's SEC filings. Copies of NXP's SEC filings are available from the SEC website, www.sec.gov.
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