US-based Qualcomm will invest $40 million in four Chinese mobile technology companies via its $150 million China strategic venture fund.
The chipmaker set up the fund this summer to invest in companies developing mobile technologies for the internet, e-commerce, semiconductors, education and health sectors.
The company said part of the investment also will go to China Walden Venture Investment fund, which invests in semiconductor related firms. The four companies are 7Invensun, a maker of eye-tracking technology; Chukong Technologies, a mobile entertainment platform provider; inPlug, a ‘smart home’ device/platform provider that develops virtualised networks using software defined network software; and Unisound, a maker of voice-recognition technology.
With a focus on semiconductors, mobile application enablers, smart home and healthcare, Nagraj Kashyap, senior VP of Qualcomm Ventures, said: “This group of startup companies closely complements existing products and services from Qualcomm’s subsidiaries. We look forward to working with these innovative companies to provide financial, marketing, technology and business support to help propel them forward in the competitive wireless ecosystem.”
The announcement comes less than a week after the company said it would cut 600 jobs around the world as part of efforts to refocus its business in new areas.
Qualcomm faces a number of challenges, including investigations into its business practices in several markets (including China), and has trimmed its fiscal expectations for Q1.
“Qualcomm needs friends in China and I hope this helps them find some,” wrote 451 Research senior VP Wally Swain in a note. “The American company wants to sell chips and protect its intellectual property. The latter is complicated by politics: The Chinese government shows no interest in allowing foreign firms to sue Chinese firms for royalties and, in fact, is investigating Qualcomm because (allegedly) its IP terms are unfair.
“Like all R&D investments, these investments might turn up something useful, especially in the semiconductor space where Qualcomm makes its money. But it will be worth US$150 million if the Chinese government lowers its aggression level and gives Qualcomm some opportunity to make money. The firm cannot simply walk away from the world’s largest mobile market.”
Last week rival Intel said it was spending $1.6 billion to upgrade its Chengdu factory with the latest chip-testing technology.
In September the company said it was investing up to $1.5 billion for a 20 per cent stake in Tsinghua Unigroup, which controls Chinese mobile silicon players Spreadtrum Communications and RDA Microelectronics.