(Yicai) Sept. 18 -- Shares of Yitoa Intelligent Control jumped after the Chinese electronic component distributor said it plans to secure a 15-year global exclusive manufacturing and sales license for three types of vehicle display chips from Nasdaq-listed mixed-signal semiconductor solutions supplier Synaptics Incorporated.

Yitoa [SHE: 300131] closed 2 percent higher at CNY16.15 (USD2.41) a share today, after earlier rising by as much as 4 percent. The broader Shenzhen market climbed 1.7 percent.

Yitoa and some of its consolidated subsidiaries will sign a licensing agreement with Synaptics to obtain the rights for part of its display driver integrated circuits, touch and display driver integration chips, and smart bridge-specific chips and solutions for intelligent cockpit displays, as well as relevant derivative products, the Shenzhen-based company said in a stock exchange filing late yesterday.

Under the agreement, Synaptics will receive a payment of USD20 million in three installments from Yitoa, as well as quarterly royalties based on net sales, the Chinese company said. However, some licensed chips cannot be sold to Chinese mainland customers, it added, without disclosing which products are restricted or why.

DDIC chips are used in non-touch car displays, TDDI chips are mainly used for touch-enabled large screens for central vehicle control and entertainment, and smart bridge chips split and distribute complete image signals across multiple adjacent display panels. The multi- and large-screen trend in car cockpits has boosted demand for all three.

The licensed products are mature chips, with peak sales period for existing inventory projects estimated to last about three to four years, according to Yitoa. By inheriting Synaptics’ customers, the partnership will help the Chinese firm gain faster access to the supply chains of leading global automakers and markedly shorten the time frame for the business to reach its harvest season, it added.

In addition, the deal will help Yitoa scale up procurement, boosting its bargaining power with upstream wafer fabs, packaging and test houses, and third-party intellectual property vendors, which will in turn cut development and manufacturing costs for its own proprietary display chips and accelerate mass production rollout, it pointed out.

California-based Synaptics is a leading global supplier of custom human-machine interface solutions. Its products are used in smartphones, tablets, personal computers, and other electronic devices, including car displays.

Editor: Martin Kadiev