By Masaki Kondo

Dec. 7 (Bloomberg) -- NEC Electronics Corp., Japan's third- biggest semiconductor maker, and China FAW Group Corp. will jointly develop car electronics to meet demand in the world's second-biggest automotive market.

NEC Electronics' China subsidiary and Qiming Information Technology Co., a unit of FAW, agreed to set up a laboratory in Changchun, northeast China, to develop the products, the Kawasaki, Japan-based company and FAW said today in an e-mailed statement. They plan to start sales from 2009.

NEC aims to build on the 50 billion yen worth of electronics products that it sold in China last year as expansion in the fastest-growing major economy fuels vehicle demand. China's passenger-car market is estimated to increase 70 percent to 9.2 million vehicles by 2012, according to Global Insight Inc.

``The automobile will probably become an electronic- controlled computer with four wheels,'' said Cheng Chuanhai, president of Qiming, in an e-mailed statement today.

NEC Electronics and FAW didn't provide financial details. Qiming will develop devices containing NEC Electronics' microcontrollers. Ryosan Co., a Japanese electronics-component distributor, is also part of the tie-up, according to the statement.

The facilities will be put into Chinese cars first in 2009. Gao Yuan, an FAW spokesman, and Zhang Xu, a Qiming spokeswoman in Changchun, declined to reveal total investment in the project.

The U.S. is the world's largest car market.

To contact the reporters on this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net Irene Shen in Shanghai at ishen4@bloomberg.net

Last Updated: December 7, 2007 03:06 EST

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