On Monday, BYD said its electronics unit had struck a deal with US-based Jabil Inc to buy its mobility business in China for 15.8 billion yuan ($2.2 billion).

The deal will expand BYD Electronic’s customer base, product portfolio and its smartphone components business as it looks to capture Jabil’s potential growth in the sector.

Jabil Circuit, which is based in Singapore and manufactures printed circuit boards, established a unit this month with product manufacturing business in Chengdu and Wuxi, which will now be sold to the Chinese group.

Shares in BYD Electronic fell as much as 9% in Hong Kong on Monday but reversed losses and were up 1.4% by the midday break. The Hong Kong-listed stock of its parent BYD was up 2.2%.

Although now best-known for its electric vehicle business, BYD started out by selling electronic components. In 2007, BYD listed its BE unit on the Hong Kong Stock Exchange.

Electronic components for consumer electronics products such as smartphones and laptops are BE’s main business. In 2022, this segment accounted for more than 70% of BYD Electronic’s total revenue.

“BYD does more than dominate in EVs,” said Tu Le, founder of Sino Auto Insights, adding that they are a supplier higher up in the supply chain.

BYD said in a filing on the exchange that the acquisition will not only increase BE’s market share, it will also enhance BE’s competitiveness, and ensure long-term sustainable development by synergizing with BE’s existing products.

The definitive agreement will allow Jabil to “enhance our shareholder-centric capital framework, including incremental share buybacks,” chief executive Kenny Wilson said in a statement.

The deal will allow Jabil to further invest in “electric vehicles, renewable energy, healthcare, AI cloud data centers, and other end-markets,” Wilson added.