Chinese electric-car maker BYD Co. Ltd. is considering an IPO for its electronic component unit in China, Bloomberg News reported Sept. 25, citing people familiar with the plan.
The division makes insulated gate bipolar transistors, or IGBT, which reduces power loss and improves reliability in electric cars, the newswire said.
The company, whose top shareholder is Berkshire Hathaway Inc., has not reached a final decision yet in terms of the timing and location of the planned offering, but the shares would likely be offered to investors in mainland China, Bloomberg said.
According to the report, BYD's electronic component business has limited competition in the IGBT market. It only counts a few companies, including Infineon Technologies AG and Mitsubishi Electric Corp., as rivals, the news outlet noted.
The IGBT market is expected to almost double to $8.55 billion between 2019 and 2024, with the majority of the demand expected to come from Asia, based on forecasts by Mordor Intelligence.
Apart from the potential IGBT business IPO, BYD is also planning to spin off its vehicle-battery operation, the report added.
A BYD spokeswoman told Bloomberg that the company does not have any information to disclose at the moment.
Shares of BYD were down 0.35% at 48.87 yuan in mid-morning trading in Shenzhen.
As of Sept. 25, US$1 was equivalent to 7.13 yuan.
