Looking to play catch-up on bigger rivals
Intel has made a major move in the mobile processor market with a significant investment in two Chinese chipmakers.
The company has confirmed it will pay $1.5bn (£920m) to acquire a 20 percent stake in Spreadtrum Communications and RDA Microelectronics as it looks to push into the Chinese market.
The two organisations, owned by parent company Tsinghua Unigroup, have close links to the Chinese government, and have established themselves as two of the leading fabless semiconductor companies in one of the world’s biggest mobile markets.
Under the terms of the agreement, Spreadtrum will work with Intel to create and sell a series of system-on-chips (SoCs) based on the company’s Intel Architecture. Initial products will be available beginning in the second half of next year and will be sold by both companies.
“China is now the largest consumption market for smartphones and has the largest number of Internet users in the world,” said Brian Krzanich, Intel CEO. “These agreements with Tsinghua Unigroup underscore Intel’s 29-year-long history of investing in and working in China.”
“This partnership will also enhance our ability to support a wider range of mobile customers in China and the rest of the world by more quickly delivering a broader portfolio of Intel architecture and communications technology solutions.”
The investment, which the companies hope will close by early next year, still needs to gain regulatory approval, but should meet little opposition, with the President of Tsinghua Unigroup, Zhao Weiguo, called China’s need to grow its semiconductor industry, “a national priority”.
“The strategic collaboration between Tsinghua Unigroup and Intel ranges from design and development to marketing and equity investments, which demonstrate Intel’s confidence in the Chinese market and strong commitment to Chinese semiconductor industry, which will accelerate the technology development and further strengthen the competitiveness and market position of Chinese semiconductor companies,” he added.
Following a less than impressive initial move into the mobile processor market, and facing major opposition from the likes of Qualcomm and Nvidia, Intel had looked more towards wearables and Internet of Things applications for its technology.
Earlier this month at its IDF conference, the company revealed new miniature, power-efficient chips which it hopes will help power its next generation of products, backed up by Intel’s A-Wear big data platform designed specifically to analyse data gathered from wearable devices.
What do you know about Intel? Take our quiz!