STMicroelectronics NV (ADR)(NYSE:STM) has signed a memorandum of understanding with Allystar, for the development and marketing of Global Navigation Satellite Systems solutions for automotive products among other applications. The signing of the agreement comes just days after the company announced it was working with research and development institute, IMECAS, on electric-vehicle batteries as well as battery management systems.
STMicroelectronics-Allystar Deal
This is not the first time that STMicroelectronics has teamed up with Allystar. The two companies are already co-marketing a number of products in the automotive sector as well as cost-competitive products for the consumer markets. However, the company’s executive vice president, Marco Monti believes the new deal will help expand the company’s footprint in China as well as Asia.
“GNSS positioning technologies are vital for a variety of services and applications and will be one of the key building blocks for autonomous driving solutions. Working closely with Allystar, the Chinese leader in GNSS/BeiDou solutions, allows ST to better address the enormous positioning market of China and Asia, “said Mr. Monti
Expansion In China
Expansion in China appears to be STMicroelectronics’ latest push if its deal with IMECAS, is anything to go by. The two companies plan to develop battery controlled systems using the most advanced Smart Power technology as well SPC5x automotive microcontrollers.
Teaming up with IMECAS is part of an effort that seeks to pursue growth opportunities in the New Energy Vehicles market. China accounts for the biggest share of the overall global market, 500,000 NEV cars having been sold in the country last year alone. With the market poised to grow to over 2 million cars by 2020, opportunities for growth have never been great for STMicroelectronics.
STMicroelectronics is now planning to ensure that its technologies play a greater role as China transitions to greener and safer technologies. The company’s power technologies smart drivers, as well as control and connectivity solutions, should position it at the center of the transition which should help bolster its bottom line in terms of a new revenue base.
Chief Financial officer, Carlo Ferro, has already stated that he expects the company’s revenue for the year to grow by between 12.5 and 15.5% given the strong demand for products.
STMicroelectronics stock was down by 6.18% in Wednesday trading session, consequently ending the day at lows of $16.09 a share.