Melexis, the Belgian designer and developer of chips primarily for automotive sensors, has signed a Master Purchase Agreement (MPA) with China’s largest electric car manufacturer BYD.
This partnership agreement gives Melexis more direct access to China’s enormous market to sell its chips in mass production, while BYD gains faster access to Melexis’s specialized sensor and driver technology and closer cooperation on future vehicle platforms.
Upgrade of an existing collaboration
Melexis has already been supplying BYD for several years, likely primarily through intermediaries or Tier-1 suppliers, but by signing the MPA or framework agreement, the relationship between the two companies is shifting toward a more direct and strategic partnership, and thus a longer-term collaboration.
Rather than having Melexis chips reach BYD primarily through other suppliers, the publicly traded Belgian company headquartered in Ypres is now a direct supplier within BYD’s global procurement ecosystem.
The agreement establishes direct purchasing and supply processes, reduces supply chain complexity, and enables closer collaboration between the engineering teams of both companies on the design of future EV platforms.
Or, in summary: fewer intermediaries, faster and more efficient supply chains, and closer cooperation between the engineering teams of both companies. Previously, many Melexis chips reached carmakers indirectly through Tier-1 suppliers such as Bosch, Continental, Valeo, Denso or ZF.
No contract value, guaranteed purchase volume, or list of future BYD models has been disclosed.
Worldwide top player
Melexis, which accounted for €839.6 million in revenue last year, of which 88% came from automotive applications, doesn’t make standard memory chips, but rather parts of the car’s “nervous system”: specialized sensor and control chips.
These include current sensors, essential for batteries and electric motors to monitor energy flow; position sensors for steering, braking, transmissions, and electric motors; pressure and temperature sensors for thermal-management systems; and driver ICs for motors and increasingly sophisticated vehicle lighting.
And while China is building EVs at a breakneck pace and has developed a massive semiconductor industry of its own, Melexis remains one of the leading specialists worldwide in automotive mixed-signal sensors and control chips.
BYD itself is also unusually vertically integrated. Its BYD Semiconductor subsidiary already develops automotive MCUs, power semiconductors, battery-management electronics and several types of sensors.
That makes the Melexis agreement particularly interesting. BYD is not turning to a foreign supplier because it cannot make automotive chips itself, but because Melexis has highly specialized technology, automotive qualification and intellectual property that remain attractive even to one of the industry’s most vertically integrated manufacturers.
And to put Melexis’ impact into perspective: the company currently states that the average new car worldwide contains about 18 Melexis chips, while in a 2023 investor presentation, a BYD Han/Dynasty-series vehicle was shown with roughly 26 to 29 Melexis integrated circuits per car.
Eight of those were associated with the electric powertrain and inverter, while others were used for braking, steering, thermal-management valves and fans, seats and door functions.
The quality standards are also extremely strict. Automotive chips have to function reliably for years under severe temperature, vibration and electrical conditions and meet demanding qualification and safety requirements.
That is the result of years of development work and gives specialists such as Melexis an advantage even as China continues its efforts to reduce dependence on foreign chips.
Strong market position within Chinese EV industry
Furthermore, Melexis has built a strong market position within the Chinese automotive industry in recent years, meaning that its partnership with BYD is by no means an isolated success.
For example, in June 2024, the premium EV brand NIO selected Melexis as a strategic supplier of current sensors for the traction inverters in all its battery-electric models. In a 2023 investor presentation, a NIO ES6 was shown with no fewer than 57 Melexis chips.
In addition, Geely uses Melexis’ smart RGB LED drivers and MeLiBu technology for the lighting in the Lynk & Co Z10, while Li Auto employs its 3D time-of-flight sensors for in-cabin gesture recognition in the Li One and the L-series. Melexis’ investor material also lists newer players, such as Xiaomi, among its OEM relationships.
As a result, Asia-Pacific alone accounted for around 60% of Melexis’s total revenue in 2024, with Greater China making up nearly half of that regional share.
Using local partners
Melexis has also invested heavily in the region. In 2025, it announced a more localized Chinese supply chain, using local partners for wafer fabrication and outsourced semiconductor assembly and testing, with local logistics support. In March of this year, it established a wholly owned Chinese entity in Shanghai.
There’s no getting around Melexis anyway. Alongside Chinese brands, its disclosed OEM relationships span virtually the entire traditional automotive industry. Volkswagen, Mercedes-Benz, BMW, Toyota, Renault, Ford, Honda, and many others are among the manufacturers connected to the company.
Furthermore, BYD is starting to shift from a Chinese exporter to a European manufacturer. The Hungarian plant in Szeged is now scheduled to begin producing the Dolphin Surf in Q4 2026, while the company is already exploring options for a second EU production location, potentially at an existing factory in southern Europe.
There is no indication that the Melexis agreement was signed specifically for BYD’s European factories. But because the MPA applies to BYD’s global procurement system, chips designed into future platforms could just as well end up in cars assembled in Europe as in China.
De-risking cuts both ways
But at a time when Brussels is calling on companies to reduce strategic dependencies on China, a Belgian company strengthening its ties with China also illustrates how complicated that policy can become.
The EU “de-risking” agenda focuses primarily on reducing critical dependencies and vulnerabilities, not on preventing European companies from exporting technology to China.
At the same time, Europe is concerned about the rapid expansion of low-cost Chinese semiconductor production and the competitive pressure it can put on European manufacturers.
It is precisely companies with genuine technological differentiation in specialized analog chips, power electronics and automotive-grade components that are considered best positioned to withstand that competitive pressure.
A fabless model
And that happens to be exactly Melexis’s market segment. Melexis operates largely on a fabless model, designing its chips in-house while relying on external foundries and manufacturing partners for wafer production, assembly, and testing.
It also needs China’s enormous market to sell those chips in mass production. Just to give some context: BYD sold 4.60 million new-energy vehicles in 2025, including around 2.26 million fully electric cars.
The risk, however, is not one-way. The more revenue and supply-chain capacity Melexis concentrates in China, the more vulnerable the company could become to future export restrictions, sanctions risks or political pressure.
But despite those risks, the relationship also underlines how interdependent the global automotive industry remains.
Melexis’ portfolio also includes industrial and robotics solutions, not just automotive ones. And BYD isn’t just any carmaker.
It is one of the world’s largest integrated technology conglomerates, with massive scale in batteries, powertrain engineering and, increasingly, production automation and robotics within its own factories.
