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* The private equity fund Wise Road Capital will hold the majority
* The movement of AMS follows the plan to focus on other sensors
* JV aims to boost sales in the Chinese market
* AMS shares earn up to 2.3% (Adding details, background, shares)
VIENNA, March 19 (Reuters) – Austrian chip maker AMS AG has decided to create a joint venture in the environmental sensor business with private equity firm Wise Road Capital.
AMS has suffered from weak demand for Apple's latest iPhones, which it provides with face-recognition technology sensors, resulting in a nearly 60% drop in fourth-quarter profits.
Wise Road Capital will hold a "small majority" in the new entity, according to an AMS spokesperson, while the latter is now focusing on optical, image and audio sensors.
The private equity fund is acquiring European and North American high-tech companies and helping them grow in China, according to its website.
He was part of the consortium that bought Nexperia's NXP Semiconductors business in 2016 before selling it to the largest guaranteed buyout out of the US market in 2018.
"Wise Road Capital sees tremendous potential in marketing the excellent technology and products developed by AMS," said Michael Zhang, managing partner of Wise Capital Road.
Environmental sensors detect temperature or humidity and can be used in the areas of automotive, buildings and air quality monitoring.
AMS units for ultrasonic flow sensors – used in smart metering solutions for utilities – and pressure sensors for the identification of fluid and gas streams will also be transferred to the company. 39, a joint venture, he added.
Investments in the new entity, valued at approximately $ 120 million, will be made based on share ownership, said AMS spokesman.
"This new joint venture (…) will focus on the advancement and development of AMS 'award winning environmental sensors, flow and pressure solutions, for which we see the greatest market potential in China. "said Chris Feige, executive vice president of AMS AG.
Stefan Raible, currently General Manager of AMS Environmental Sensors, will lead the joint venture. The staff will continue to work in Eindhoven, the Netherlands, where the joint venture will also have its headquarters, according to the spokesman.
When asked about the number of employees affected, he replied "more than 100 to 1,000".
AMS shares listed in Switzerland rose 2.3% to 29.26 Swiss francs, while the European technology index remained unchanged. The AMS share amounted to about 115 Swiss francs the previous year. (Report by Kirsti Knolle, edited by Louise Heavens and Kirsten Donovan)
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