(Yicai) July 4 -- Hongxin Electron-tech, a Chinese maker of flexible printed circuit boards transitioning into an artificial intelligence computing service provider, said it has penned an agreement to provide computing power for AI to a state-owned firm in Shenzhen.

Hongxin aims for the agreement, signed yesterday, to be worth CNY500 million (USD68.8 million) in the first year and CNY1 billion (USD137.6 million) within three years, the Xiamen-based firm announced late yesterday, without disclosing the name of the SOE.

The partner will prioritize using the computing power of Hongxin and its associated firms in Guangdong province, according to the company. 

The use of AI in the Guangdong-Hong Kong-Macao Greater Bay Area is very active and leads China, Hongxin noted. The partnership marks a breakthrough in the firm's market development in the area and will positively impact its local business development and brand building, as well as speed up the development of its AI computing service business, it added.

Hongxin and its new client are also planning to jointly build a plant to produce high-performance AI servers as well as making joint efforts to develop customize AI server products for the new client, it pointed out.

In addition to setting up AI computing centers in several Chinese cities, Hongxin has joined hands with Shanghai-based AI computing chip developer Enflame Technology to make AI computing servers to develop itself into a one-stop solution provider for computing hardware and computing services. Its operating revenue was CNY3.5 billion last year.

Shares of Hongxin [SHE: 300657] closed 0.1 percent down at CNY14.51 (USD2) apiece in Shenzhen today, after jumping by as much as 3 percent in the morning trading session.

Editor: Martin Kadiev