A subsidiary of Chinese electric vehicle maker Nio Inc. NIO has acquired a small stake in a unit of Shanghai-listed AI chip company Cambricon, cnEVpost reported Sunday.
What Happened: The move comes after Cambricon said Friday it has agreed to increase the registered capital of its wholly-owned subsidiary Cambricon Xingge by 170 million yuan ($26 million) and bring in investors, as per the report.
Nio’s subsidiary Weiran (Jiangsu) Investment Co. Ltd. acquired a 2% stake in Xingge for RMB 4 million ($630,000).
Weiran is wholly owned by XPT, NIO's motor business subsidiary, the report noted.
See Also: Nio Stock Reaches Critical Level: Now What?
Why It Matters: Nio’s acquisition of a stake in a chip company comes amid the crippling global chip shortage that has disrupted manufacturing across sectors and even forced global automakers to halt production.
More industry voices are now indicating the shortages could spill over to next year and requires investment. In April, Intel Corp. INTC CEO Pat Gelsinger warned that the global semiconductor chip supply shortage could stretch two more years.
It was reported in October last year that Nio is planning to embark on in-house R&D to develop computing chips for autonomous driving and has set up a separate hardware team, internally named Smart HW, for that purpose.
Price Action: Nio’s shares closed more than 2% lower in Friday’s trading at $42.80.
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Photo: Courtesy of Nio
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