(Yicai Global) Nov. 8 -- San’an Optoelectronics’ semiconductor subsidiary has secured an order worth CNY3.8 billion (USD525 million) to develop and manufacture silicon carbide chips for a new energy vehicle company, the Chinese light-emitting diode chipmaker said yesterday.

Hunan San’an Semiconductor, which is wholly owned by San’an Optoelectronics, will supply the NEV firm, which was not named, with silicon carbine chips that will be used in its major drive systems, Xiamen, southeastern Fujian province-based San’an said yesterday, citing the letter of intent penned by the two parties on Nov. 6. No details about the order quantity were given.

Power devices equipped with silicon carbide chips greatly improve the density, energy efficiency and mileage of electric cars. There is huge market potential for this type of chip as NEV sales boom.

The partnership will be divided into two stages, San’an said. The first stage is R&D and this will be carried out next year. Then the bulk supply of products will take place from 2024 to 2027.

The announcement did not disclose the name of its NEV client citing a confidential agreement between the two parties. Hunan San’an Semiconductor, though, set up a joint venture with NEV startup Li Auto in March to develop and produce automotive-grade silicon carbide chips. Trial production is expected to start in May next year and it should be fully up and running by 2024.

San’an’s share price [SHA:600703] closed down 2.6 percent at CNY20 (USD2.76) today.

Editor: Kim Taylor