Handset chip designer MediaTek Inc (聯發科) said it is to buy a stake in a Beijing-based map location service provider in a bid to cement its foothold in the automotive chip and the Internet of Vehicles markets.
MediaTek on Friday said that it plans to spend up to US$100 million through its subsidiary Gaintech Co (訊發) to buy a 35 to 49 percent stake in Mapbar Technology Ltd (BVI), which owns Beijing Mapbar Technology Co Ltd (北京圖吧科技).
MediaTek would indirectly hold a stake in Beijing Mapbar if the bid obtains the Investment Commission’s approval.
MediaTek said that Beijing Mapbar, which was set up in 2004, operates www.mapbar.com, which provides online map services in four municipalities in China.
The service covers roads stretching 2 million kilometers in China.
Beijing Mapbar is the largest online and wireless map service provider in China, with a more than 80 percent share of the Chinese map service market.
Beijing Mapbar offers mobile apps, navigation products and services — such as map search and location query — and transportation planning services for Internet users, according to Bloomberg.
MediaTek’s announcement came after it unveiled a plan in May to partner with Chinese electronic navigation map provider NavInfo Co (四維圖新) through a cooperation framework.
According to the cooperation framework with NavInfo, MediaTek is to sell its automotive chip subsidiary, AutoChips Inc (傑發), headquartered in Hefei City, China, to NavInfo for US$600 million.
MediaTek is also planning to spend up to US$100 million to set up a joint venture with NavInfo.
Last week, MediaTek secured approval from the China Securities Regulatory Commission to sell AutoChips to NavInfo. The disposal is expected to boost MediaTek’s profits to a range of NT$10 billion to NT$12 billion (US$317.7 million to US$381.3 million) in the next three years.
The profit is expected to boost MediaTek’s earnings per share by NT$3 this year and next year.
NavInfo, founded in 2002, lists major companies, such as BMW AG, Mercedes-Benz, Volvo Car Corp, Toyota Motor Corp and China’s Great Wall Motor Co (長城汽車), among its clients.
Shares of NavInfo are traded on the Shenzhen Stock Exchange.
Since NavInfo owns a stake in Beijing Mapbar, MediaTek’s investment in Beijing Mapbar is expected to solidify its partnership with NavInfo.
MediaTek specializes in smartphone chip development and smartphone chip accounts, which comprise about 60 percent of the company’s sales.
Faced with escalating competition from its rivals, including China-based Spreadtrum Communications Inc (展訊), MediaTek has been extending its reach beyond smartphone chips and has set its sights on the automotive chip business.
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