A strategic move to expand its smartphone components business
Chinese electric vehicle maker BYD Co Ltd announced on Monday that its electronics unit, BYD Electronic (International) Co (BE), has agreed to buy the mobility business of US-based manufacturing firm Jabil Inc’s Singaporean division for 15.8 billion yuan ($2.2 billion). The deal will help BE to expand its customer base, product portfolio, and market share in the smartphone components sector, as well as enhance its overall competitiveness and long-term sustainable development.
BE is a leading supplier of electronic components for consumer electronics products such as smartphones and laptops. It accounted for more than 70% of BYD’s total revenue in 2022. The acquisition will enable BE to leverage Jabil’s potential growth in the sector and synergize with its existing products.
Jabil is a global provider of manufacturing solutions for various industries, including healthcare, telecommunications, computing and storage. It established a unit this month with product manufacturing business in Chengdu and Wuxi, which will now be sold to BE. The unit mainly produces printed circuit boards, which are essential parts of electronic devices.
A win-win situation for both parties
The deal is expected to benefit both BYD and Jabil in terms of financial performance and strategic positioning. For BYD, the deal will strengthen its position in the smartphone components market, which is expected to grow rapidly in the coming years due to the increasing demand for smart devices and the development of 5G technology. BYD will also gain access to Jabil’s global network of customers and suppliers, as well as its advanced technology and management expertise.
For Jabil, the deal will allow it to focus on its core businesses and invest in other high-growth areas, such as electric vehicles, renewable energy, healthcare, AI cloud data centers, and other end-markets. Jabil’s CEO Kenny Wilson said that the deal would enable the company to “enhance our shareholder-centric capital framework, including incremental share buybacks”. He also said that Jabil would continue to cooperate with BYD in other areas of mutual interest.
A reflection of BYD’s diversified business model
The deal also reflects BYD’s diversified business model, which covers not only electric vehicles but also other segments such as electronics, batteries, rail transit, and solar energy. Although BYD is now best known for its electric vehicle business, it started out by selling electronic components in 1995. In 2003, it entered the car industry by acquiring a local automaker Qin Chuan. In 2007, it listed its BE unit on the Hong Kong Stock Exchange.
BYD has been one of the leading players in the global electric vehicle market, competing with Tesla, Volkswagen, and Toyota. It has also been expanding its presence in overseas markets such as Europe, Latin America, and Africa. In addition, BYD has been developing its own battery technology and has recently launched a new blade-shaped battery that claims to offer higher safety and efficiency.
The deal with Jabil shows that BYD is not only a dominant force in electric vehicles but also a major player in the mobile supply chain. It also demonstrates BYD’s ambition to pursue innovation and growth in various fields.
