Wingtech Technology Co, which assembles smartphones for top Chinese Android brands like Xiaomi, aims to build up its expertise in chip design and production by acquiring Nexperia
Electronics manufacturer Wingtech Technology Co has seen its fortunes prosper since it was founded in 2006 amid China’s development as the world’s biggest smartphone market.
While it has become a major smartphone assembler for some of the country’s top brands, the Shanghai-listed company was not widely known outside the hi-tech industry.
That all changed when Wingtech disclosed in April that it looked to buy Netherlands-based chip maker Nexperia for US$3.6 billion. The Chinese firm received further attention last week after a regulatory filing showed that it plans to raise 4.63 billion yuan (US$666 million) by issuing 127.45 million shares, an amount that would not cover the total cost of its proposed acquisition.
Target company Nexperia is based in Nijmegen, a city in the Dutch province of Gelderland. This company was sold by parent NXP Semiconductors in 2016 to a consortium of Chinese investors, led by Beijing Jianguang Asset Management Co and Wise Road Capital.
Wingtech’s initiative to buy Nexperia shows how China remains focused on gaining self-sufficiency and parity in semiconductors, which go into and power everything from smartphones to smart speakers to the most advanced super computers and autonomous cars.
Apart from the challenge of raising funds to take over a large chip maker, Wingtech must also face the prospect of having that deal blocked by the US because of its trade war with China and the perception that Chinese hi-tech companies are threats to national security.
Here are a few things to know about Wingtech:
1. What is the business of Wingtech Technology Co?
Based in Jiaxing, a city in the eastern coastal province of Zhejiang, Wingtech claims to be the world’s largest smartphone original design manufacturer (ODM), with a 10 per cent global market share. As an ODM it designs and manufactures devices based on specifications of the client company, which sells the products under its brand.
Its biggest success to date is the line of low-cost Redmi smartphones that it produces for Xiaomi Corp.
