US chipmaker Qualcomm signed a strategic agreement with the government of Guizhou province in China to create a joint venture to develop advanced chipsets for servers.
The venture, Guizhou Huaxintong Semiconductor Technology, was set up with an initial capital of CNY1.85 billion ($280 million), with the provincial government holding a 55 per cent interest and a Qualcomm subsidiary owning 45 per cent, the company said in a statement. As part of the agreement, Qualcomm also will create an investment company in Guizhou to handle future investments in China.
“The strategic cooperation with Guizhou represents a significant increase in our collaboration in China,” said Qualcomm president Derek Aberle. “We are not only providing investment capital, but we also are licensing our server technology to the joint venture and assisting with R&D process and implementation expertise.”
Aberle said the agreement underscores its commitment as a strategic partner in China.
The chipmaker has long faced troubles in the country, which were only resolved a year ago. Last February Qualcomm was fined $975 million by China’s antitrust regulator and agreed to modify its licensing practices and reduce royalties to satisfy the government’s anti-competitive ruling.
Since that settlement, the company has announced a number of initiatives to expand in China.
In June, together with Huawei and Belgium’s microelectronics R&D centre imec, Qualcomm teamed up with China’s largest semiconductor foundry to establish a joint-venture company. The venture – SMIC Advanced Technology Research & Development (Shanghai) – aims to help China’s microchip leader Semiconductor Manufacturing International Corp (SMIC) to develop the next-generation of advanced integrated circuits.
Qualcomm has supported SMIC in the past to develop chips, but this venture covers more advanced technology. Analysts say the partnership is about allowing more companies to manufacture the chips Qualcomm designs and helping to improve its relationship with the government.
In April it set up a unit in Shenzhen to give domestic handset vendors support in marketing their devices abroad.