MediaTek to buy stake in Beijing’s map service firm

MediaTek Inc. (???), a major integrated circuit designer in Taiwan, has agreed to buy a stake in a Beijing-based map location service provider in a bid to strengthen its foothold in the automotive chip and the Internet of Vehicles (IoV) markets.

Through its subsidiary Gaintech Co., MediaTek said, the IC designer plans to spend up to US$100 million to take a 35 to 49 percent stake in Mapbar Technology Ltd. (BVI), which owns Beijing Mapbar Technology Co., Ltd.

Through the investment, MediaTek is expected to indirectly hold a stake in Beijing Mapbar. The investment is pending approval from the Investment Commission of Taiwan's Ministry of Economic Affairs.

MediaTek said that Beijing Mapbar, which was set up in 2004, operates, which provides online map services in four municipalities in China.

The services cover roads which surpass 2 million kilometers on the mainland.

Beijing Mapbar is currently the largest online and wireless map service provider in China, grasping a more than 80 percent share of the China map service market.

According to Bloomberg, Beijing Mapbar offers mobile apps, and navigation products and services, while the Chinese firm also offers map search, location query, and transportation planning services for Internet users.

The announcement to invest in the Beijing map service provider came after MediaTek's plan unveiled in May to partner with Chinese electronic navigation map provider NavInfo Co. (????) through a cooperation framework.

Under the cooperation framework with NavInfo, MediaTek will sell its automotive chip subsidiary AutoChips, headquartered in Hefei City, eastern China, to NavInfo for US$600 million, while the Taiwanese firm is also planning to spend up to US$100 million to set up a joint venture with NavInfo in the future.

Last week, MediaTek secured approval from the China Securities Regulatory Commission to sell AutoChips to NavInfo. The disposal is expected to help MediaTek post NT$10 billion (US$317 million) to NT$12 billion in profit in the next three years.

The profit is expected to boost MediaTek's earnings per share by NT$3 in 2016 and 2017.

NavInfo, founded in 2002, has major clients including BMW, Mercedes Benz, Volvo, Toyota and China's Great Wall Motor. Currently, shares of NavInfo are traded on the Shenzhen Stock Exchange.

Since NavInfo already owns a stake in Beijing Mapbar, MediaTek's investment in Beijing Mapbar is expected to strengthen its partnership with NavInfo.

MediaTek specializes in smartphone chip development and smartphone chips accounts, which comprise about 60 percent of the company's total sales.

Faced with escalating competition from its rivals, including China-based Spreadtrum Communications Inc. (??), MediaTek has been gearing up to extend its reach beyond smartphone chips and has set its sights on the automotive chip business.

Source: Focus Taiwan News Channel