Recently, Shanghai Mayor Gong Zheng met with NXP Semiconductors CEO Kurt Sievers. Sievers was accompanied by the incoming CEO Rafael Sotomayor for discussions in China.Sievers stated that the Chinese market has become NXP’s largest single market globally, and the company values its collaboration with Chinese enterprises. NXP believes that success in China will translate to success in the global market. Recently, NXP proposed a localization strategy of “In China, For China, For the World.”Currently, NXP operates a large packaging and testing factory in Tianjin, but wafer manufacturing still primarily relies on its facilities in the United States and Singapore.Notably, Zhou Xiang, NXP’s Automotive Electronics Market Director for Greater China, revealed that the company is selecting a wafer factory in China as a partner, planning to produce its products entirely within the Chinese market, from front-end to back-end, from wafer to packaging and testing.China is not only the world’s largest electric vehicle (EV) producer but also the largest EV market.Sievers compared the sluggish industrial markets in Europe and America with the “stunning growth” of electric vehicle sales in China. He pointed out that despite the impending competition from local companies, especially impacting low-end MCUs, NXP aims to advance towards more efficient automotive processors.NXP’s Senior Vice President of Investor Relations, Jeff Palme, stated to investors in May that the local chip manufacturing supply chain is crucial for NXP. Currently, about 36% of NXP’s revenue comes from China, with approximately half sold to multinational companies for re-export and the other half to Chinese companies headquartered in China. These companies have explicitly requested NXP to establish an independent supply chain in China.At present, NXP collaborates with three different wafer factories, including TSMC’s Nanjing plant for 16nm and 28nm processes; SMIC for products above 28nm; and Hua Hong as a partner for NXP’s mixed-signal chips. Additionally, NXP has a large backend packaging assembly plant in Tianjin.In January of this year, NXP established a new “China Business Unit”. Currently, the local engineering team has defined, designed, and developed 200 products for customers. NXP noted that about one-third of Chinese companies have adopted a “Made in China” strategy, and this proportion is expected to increase over time. To serve the Chinese market, NXP plans to produce its products entirely within China, from front-end to back-end.
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