SAIC last year launched the Roewe ERX5, an electric SUV with a broad range of connected features (Photo: SAIC)

Infineon and SAIC Motor Corp. will jointly develop power modules for Chinese electric vehicles, giving the German semiconductor group a stronger foothold in the world’s biggest auto market.

Infineon said SAIC, one of China’s largest automotive companies, will hold a 51 pc stake in the joint venture, which is called SAIC Infineon Automotive Power Modules or SIAPM.

The cooperation was forged against a backdrop of strong growth in China’s EV sector. Analysts at IHS Markit expect production of plug-in hybrid and full electric vehicles to soar to 4.3 million units by 2024 from around 2.0 million in 2020. The Chinese EV market is also expected to remain far ahead of any other national market in coming years.

The SIAPM joint venture, which is headquartered in Shanghai, will operate a manufacturing facility at an existing Infineon plant in Wuxi, 130 km west of Shanghai. Volume production of the planned EV power modules is scheduled to start in the second half of 2018.

Infineon said China is the largest and fastest growing market for electric vehicles. It added that SAIC, as the dominant car group in the country, will be a strong partner to help it expand its position in China.

“Joining forces allows us to significantly expand our manufacturing capacities in order to satisfy the ever growing demand," Infineon management board member Jochen Hanebeck said in a press release. “Together we plan to generate even more business with products tailored to the needs of the Chinese electric vehicle industry.”

SAIC said the joint venture will benefit from Infineon’s existing expertise in power modules. “This perfectly combines with our broad and in-depth system-level expertise in electric vehicles," said SAIC Group President Zhixin Chen.

-By Arjen Bongard