(ATF) An automotive technology startup backed by internet giant Baidu and the chairman of Geely said on Tuesday it planned to supply much sought-after semiconductors through a joint venture (JV) with Arm China.
Ecarx, founded in 2016, said the 7-nanometre (nm) chips would be used in smart cars and high-definition mapping software.
Shen Ziyu, Ecarx chief executive, said the JV, Siengine, would start supplying the new chip products from the end of next year or early 2023.
Taiwan Semiconductor Manufacturing Company (TSMC) would manufacture the chips, Shen said.
Chips with 7nm process technology have relatively higher capabilities of processing for smart cars. Other companies working on 7nm or more advanced chips include Qualcomm.
Siengine's products will use Arm's chip design intellectual property and Ecarx would make them suitable for 'smart' car software, Shen said.
Shen told Reuters that the JV’s customers would include Geely-owned and affiliated group such as Lotus, Lynk & Co, Polestar, Smart and Volvo Cars. Ecarx is also talking with other manufacturers, he added.
RANGE OF CUSTOMERS
Analysts said the JV was another signature deal for Geely, which has pursued a number of high-tech tie-ups in recent months, including agreements with Baidu, Foxconn, Tencent and Volvo on smart driving and electrification.
"Its goal is to pursue electric vehicle leadership, which should create synergies and opportunities," Alexious Lee, an equity analyst at Jefferies in Hong Kong, said.
Shen, a former General Motors executive, said Ecarx, which is privately held, has already supplied equipment to 2.5 million vehicles.
Geely shares fell 1.4% to HK$19.62 in Hong Kong trading on Tuesday, while Baidu stock rose 2.1% to HK$207.80. Stockholm-listed Volvo shares closed on Monday at 224 kronor, down 2%.
The Arm China announcement comes a week after Ecarx launched a JV with Volvo to develop in-car operation software systems such as for entertainment and information.
“The JV would allow both companies and the wider Geely Group to speed up technology development, improve cost efficiency and create new revenue streams,” Ecarx said in a statement.
In the past few months, Ecarx has raised about $400 million from investors, including Baidu and US-based Susquehanna International Group, which also invested in TikTok owner ByteDance.
Ecarx is setting up an office in Sweden, plans to expand its partnership in Malaysia and boost its workforce to about 2,000 this year, 300 above its current level.
With reporting by Reuters