BEIJING, China: Chinese automaker BYD has said that its electronics unit, BYD Electronics, has signed an agreement with US based manufacturer Jabil to buy its mobile electronics manufacturing business in China for 15.8 billion yuan ($2.2 billion).

Aimed at capturing Jabil’s potential growth in the mobile electronics sector, the agreement will help expand BYD Electronics’ customer base, product portfolio and smartphone components business.

Despite being currently known for manufacturing electric vehicles, BYD began as an electronic components producer. In 2007, it listed its BE unit on the Hong Kong Stock Exchange.

BE has been selling electronic components for consumer electronics products, such as smartphones and laptops, which accounts for more than 70 percent of its total revenue in 2022.

“For BYD, I think it’s a reminder that they do more than just dominate in EVs,” said Tu Le, founder of consultancy Sino Auto Insights, adding that they were higher up in the mobile supply chain and were a supplier to Apple Inc.

Citi analysts said BYD Electronics will likely have to fund the acquisition with loans and equity issuances.

“While improving BE’s market share of products, the acquisition will effectively synergize with BE’s existing products, enhance the overall competitiveness, and ensure long-term sustainable development,” BYD said.

In a statement, Jabil Chief Executive Kenny Wilson said, “The deal would allow Jabil to further invest in “electric vehicles, renewable energy, healthcare, AI cloud data centers, and other end-markets.”

UBS Research analysts said Jabil’s board has focused on addressing the “lack of growth” at its mobile parts business.