The first mass-produced smart vehicle developed by Shanghai Automotive Industry Corporation (Group). [Long Wei/for China Daily]

NXP Semiconductors, the world's top chip maker for the auto industry, is in discussions with Baidu Inc on a partnership to promote self-driving technology, as part of a broader effort to tap into the booming internet of vehicle market in China, a senior executive said.

Kurt Sievers, general manager of automotive business at NXP, said the two sides will cooperate on radar solutions, computer technology and possibly on cyber security issues.

China is expected to surpass the United States as the company's largest automotive business market in three years, he said.

"We believe Chinese auto brands will conquer the world. It will offer great growth opportunities for us, "Sievers said in an interview with China Daily. "By being here early with new local stars, we can help them and us become globally successful. It is not only about China, but winning with Chinese customers."

The Dutch company inked a deal with the government of Chongqing in southwestern China on Thursday to set up an application center, ensuring that its increasingly complex products, especially microprocessors, can fully support local partners.

With a focus on application engineering, it plans to build a team of 100 people in Chongqing. The municipality is the largest auto production base in China, with an annual production capacity of 4 million units. NXP did not disclose the investment sum.

The move came shortly after NXP signed deals with Changan Automobile, Geely Automobile Group and Guangzhou Automobile, three major car makers in China, for cooperation in both electrification and autonoumous vehicles.

According to Sievers, the company is also discussing possible cooperation with auto maker BYD Co Ltd.

NXP is the world's biggest semiconductor supplier to the car sector, with a market share of 14.2 percent. It is followed by German semiconductor company Infineon Technologies AG, which accounts for 10.4 percent, data from Strategy Analytics show.

Zhang Zhiyong, founder and CEO of Wenfeng Automobile Consultancy, said vehicles are becoming increasingly smart and digital, which will spur a huge demand for auto chips.

"Its years of experience in partnering with both auto makers and technologies companies will give NXP a big edge in market," he added.

In April, NXP signed a partnership with a subsidiary of China's Ministry of Industry and Information Technology to prepare for opportunities in intelligent transportation.

Under the deal with the China Academy of Information and Communications Technology, the think tank of the ministry, the two sides will cooperate on the research and development of industry standards for the internet of vehicles, talent exchange and product development.

In addition, NXP set up a joint venture in 2013 with State-owned telecom company Datang Telecom to make semiconductors for new-energy vehicles.