NXP Semiconductors NV, which last year merged with Freescale Semiconductor Ltd., is weighing a sale of its standard products business, people familiar with the matter said.

NXP may seek at least $2 billion for the unit, which makes diodes, transistors and other standard chip products, according to the people. The business has drawn interest from Chinese suitors including Jianguang Asset Management Co., the Beijing-based investment firm known as JAC Capital, the people said, asking not to be identified as the process isn’t public.

Bidders from China, seeking to develop a local semiconductor supply chain, have faced setbacks in their pursuit of technology assets after the U.S. government expressed concerns over national security. In January, Royal Philips NV scrapped the $2.8 billion sale of its lighting-components business to a Chinese consortium following opposition from the Committee on Foreign Investment in the United States, or CFIUS.

NXP’s standard products unit, which accounted for one-fifth of its sales last year, mass produces chips used in phones, television sets and cars. A spokesman for NXP, based in the southern Dutch city of Eindhoven, declined to comment. A representative for JAC Capital declined to comment.

“It makes total sense, and it has been discussed before,” Anand Srinivasan, an analyst for Bloomberg Intelligence, said by phone. “It fits in with the company’s strategy and management’s desires.”

Shares of NXP rose 2.8 percent to $83.60 at 10:01 a.m. in New York, after jumping the most in a month, valuing the company at about $29 billion.

State-owned JAC Capital acquired NXP’s radio frequency chip unit for about $1.8 billion last year in a deal that helped smooth regulatory approval for the Freescale merger. In February last year, NXP said it plans to form a Chinese joint venture with JAC Capital.

NXP, which is now the biggest chip supplier to the automotive industry, has shifted to supplying chips for secure processing and connectivity since completing the Freescale merger. Revenue from the standard products unit fell 3 percent to $1.24 billion last year, while it booked operating profit of $264 million.

By: DocMemory
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