NEC Electronics eyes growth in China's microcontroller market

SHANGHAI -- Japan's NEC Electronics Corp. aims to boost China automotive sales by 20 percent in the short term, partly by expanding into low-end microcontrollers.

China sales currently account for less than 10 percent of NEC Electronics' global automotive revenue of $1.5 billion (10.4 billion yuan). But the company aims to increase business through a partnership with the China FAW Group Corp.

Hideyuki Nagai, director of NEC Electronics' Automotive Systems Division, did not offer specific figures for current China sales or its revenue forecast. But he envisions sales growing "by at least 20 percent in the next few years."

To better tailor its products to local needs, NEC Electronics opened a dedicated China automotive unit on April 1. The Shanghai-based unit employs 26 people.

Microcontrollers are embedded computers that help control the functions of auto systems. For example a microcontroller linked to a car's car body might control the doors, windows or lights.

NEC will offer a new set of 16-bit controllers for low-end cars by year's end, says Hiroaki Kaneko, general manager of the company's automotive division.

Traditionally, cars use 32-bit microcontrollers connected to 8-bit counterparts. The 16-bit microcontrollers offer higher functionality than the 8-bit ones, but are not as costly as the 32-bit top-shelf products.

Such middle-range products meet current demand in Asia, says Zhao Mingyu, director of the company's China and Hong Kong unit.

Regional demand for high-end microcontrollers for such functions as lane tracking and collision avoidance is seen increasing several years down the road, he adds.

Key to NEC Electronics' business in China will be a partnership signed in December of 2007 with FAW Qiming Information Technology Co., a subsidiary of the FAW Group. It gives the company access to FAW's ventures with Toyota and Volkswagen.

The two companies will work together to develop electronic control units for body control modules, dashboards and car audio systems, Zhao says. In the future the partnership will develop power train applications.