MACOM Technology Solutions Holdings, Inc. reported that it has agreed to partner with Goertek Inc. to establish a joint venture company. Goertek is a multibillion-dollar electronic components company based in Shandong, China. The joint venture company will be based in Hong Kong and will supply, market, and distribute GaN-on-Si based RF Power components into China’s base station market, which includes its 5G buildout.
Goertek will provide to MACOM up to $134.6 million, including $30 million up front. Under the terms of the joint venture agreement, MACOM will further be entitled to royalties and dividend preferences. Goertek and MACOM will each contribute $25 million in working capital to the joint venture. MACOM retains rights to sell GaN-on-Si products outside of China, Hong Kong, and Macau.
“This joint venture is a capstone to MACOM’s strategy to become a scale player within the multi-billion dollar 5G basestation market in China, which in turn enables us to further invest in U.S.-based innovation,” stated John Croteau, President and Chief Executive Officer of MACOM. “We are pleased to be able to leverage our existing design capabilities and resources in China by aligning with a JV partner of the caliber of Goertek. They perfectly complement our GaN-on-Si based RF Power component products with high-volume manufacturing expertise, well-connected sales and proven supply chain management into China’s top OEMs and service providers.”
Long Jiang, CEO of Goertek commented, “We are delighted to announce this important partnership with MACOM. Leveraging MACOM’s superior GaN-on-Si technology, we will provide world-leading RF components to the 5G market in China, as well as enriching our RF capabilities.”
The transaction is subject to certain specific conditions, including receipt of approval from China’s State Administration for Market Regulation, and is expected to close in the second half of the calendar year.