(Yicai Global) March 11 -- Chinese display and white goods maker TCL Technology, which boosted its net profit by more than half last year, has confirmed that it will form a semiconductor subsidiary to seize opportunities in the rapidly growing sector in China.

The company and TCL Industries Holdings, controlled by founder Li Dongsheng, will set up a 50:50 unit with CNY1 billion (USD153.7 million) in registered capital in Guangzhou to invest in integrated circuit design and power semiconductor devices, the Huizhou-based TV set maker said in a statement yesterday.

Li told Yicai Global in an interview last week that the company has set up a semiconductor business division and is exploring investment opportunities in the chip industry to boost the firm’s competitiveness.

TCL revealed its 2020 earnings report yesterday. The company recorded a 67.6 percent jump in annual net profit to CNY4.4 billion from a year earlier, mainly driven by its display panel unit China Star Optoelectronics Technology. The parent's revenue climbed by 33.9 percent to CNY76.7 billion (USD11.8 billion).

The new fabless unit will focus on developing semiconductors, such as driver chips and artificial intelligence chips that support voice commands, which will be used in TCL's products to promote the related fields and help TCL make breakthroughs in market development.

The company has been looking to expand via acquisitions. Unit CSOT is in the process of purchasing Samsung Electronic’s LCD panel plant in the eastern Chinese city of Suzhou with the transaction expected to close this month.

The plans and the surging net profit failed to buoy the company's shares. TCL's stock price [SHE: 000100] was 1.8 percent down at CNY8.90 (USD1.40) this morning. Meanwhile, the Shenzhen Composite Index was 1.8 percent up.

Editor: Emmi Laine, Xiao Yi