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NEC buys out Chinese partner in chip design

TOKYO - The NEC Corp group has made a joint-venture semiconductor circuit design firm in Beijing into a wholly owned subsidiary.

Beijing Huahong NEC IC Design Co was established in 1998 as a 60:40 joint venture between the NEC group and Beijing Huahong Integrated Circuit Design Co, capitalized at US$20 million. The venture designs circuits such as microcontrollers for consumer electronics and mobile phones.

NEC bought out its Chinese partner's entire stake on December 1, and within the year, semiconductor subsidiary NEC Electronics Corp will make the Chinese firm a wholly owned subsidiary by purchasing the shares from NEC.

The Chinese venture has relied heavily on NEC Electronics for design orders. By taking full control of the unit, NEC Electronics aims to bolster semiconductor sales in China and intends to have local chip design orders filled by its new subsidiary.

The aim is to have 90 percent of the new subsidiary's business come from local sources in four or five years. Gross revenue is also seen growing to 5 billion yen ($46.5 million) in 2005 from about 1 billion yen in 2003.

(Asia Pulse/Nikkei)

Dec 19, 2003

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