MACOM and Goertek, a multi-billion dollar Chinese electronic components manufacturer, are forming a joint venture (JV) company to market and distribute MACOM’s GaN on Si RF power amplifiers to China’s base station market.

For rights to the Chinese market, including Hong Kong and Macau, Goertek will provide MACOM with up to $134.6 million in “total consideration,” beginning with $30 million in up-front payments, according to a MACOM statement. MACOM will receive royalties and dividends from the JV and retains the rights to sell GaN on Si products outside of the area served by the JV.

MACOM and Goertek will each contribute $25 million in working capital to fund the JV, which will be based in Hong Kong. The venture requires approval from China’s State Administration for Market Regulation, which, with the other required steps, is expected during the second half of the year.

“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. 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.” — John Croteau, MACOM president and CEO

Goertek was founded in 2001, went public in 2008 and is traded on the Shenzhen stock exchange. The latest financials from the company’s website report revenue of 15.4 billion yuan or approximately $2.3 billion for the nine-month period from 1 January through 30 September 2018.

“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.” — Long Jiang, CEO of Goertek