Cogo announces Xilinx partnership to target China's high-speed railway build-out

SHENZHEN, CHINA: Cogo Group Inc. has announced a strategic partnership with Xilinx, a leading global provider of field programmable gate arrays ("FPGAs") in the semiconductor industry.

Initially, this strategic partnership will be focused on embedded signaling control functions within China's high-speed railway build-out.

China is in the early stages of an aggressive High-Speed railway build-out across the country, with total High-Speed Railway lines that can support trains running at 350 km/hr (210 m.p.h) expected to grow from 2,000 km currently to 16,000 km in 2020.

Cogo is currently engaged with a variety of railway providers, including China South Locomotive & Rolling Stock Corp. Ltd (CSR), and Xilinx's highly technical product offerings will enable Cogo to drive solutions deeper into these key high-speed railway accounts.

Cogo recorded small amounts of revenue from the Xilinx partnership in the second quarter of 2010 and anticipates the business will accelerate through 2011 and 2012. In addition to High-Speed Railway solutions, Cogo expects to collaborate with Xilinx on a number of fast growing Industrial and Consumer verticals, including medical, LED, broadcasting, gaming and automotive.

Cogo plans to design customized solutions across its 1,500-strong customer base utilizing both the Virtex and Spartan product lines from Xilinx.

Currently, Cogo is testing Xilinx solutions with over 100 customers within Cogo's sales channel. Over time, Cogo expects that the addition of Xilinx and Intel to its solution line-up will be a key driver of its Small and Medium Enterprise strategy.

Earlier in 2010, China Electronic News named Xilinx, along with Broadcom and Freescale, as three of the top 10 most popular semiconductor brands in China. Cogo now works with all three of the leading global semiconductor franchises.

"We are extremely pleased to add Xilinx as a key design partner for Cogo as it opens up large new markets for our embedded system solutions and acts as a clear validation of our strong position in China," commented Jeffrey Kang, CEO of Cogo.

"Xilinx views our installed customer base of 1,500 customers as a clear competitive advantage and sees great value in both our dedicated marketing and engineering support as well as our strong design-in/design-win capabilities. Overall, our sales pipeline continued to build nicely in the third quarter of 2010 providing us with strong visibility into solid growth in the back half of 2010 and into 2011, particularly in our digital media and industrial business units."