Intel is to invest $1.5bn in a Chinese semiconductor group, which will develop and sell Intel-based chips for smartphones to address both the Chinese and the broader global markets.
The deal, which is expected to close in early 2015, will see Intel invest up to nine billion Chinese Yuan Renminbi (about $1.5bn) for an estimated 20 percent stake in Tsinghua Unigroup. As part of the agreement, the two firms are to jointly develop Intel-based chips for mobile phones.
Tsinghua Unigroup is a holding company that owns Spreadtrum Communications and RDA Microelectronics, both China-based fabless semiconductor firms that develop mobile chipsets for smartphones and other devices, with support for 2G, 3G and 4G wireless standards.
In particular, Spreadtrum is set to create and sell a family of Intel-based system on a chip (SoC) products that will be sold by both companies, with initial products expected to be available from the second half of next year, Intel said.
The move appears to be aimed at expanding Intel’s presence in the smartphone market, which is dominated by ARM-based SoC products from manufacturers such as Qualcomm, Samsung and Broadcom.
While Intel has had one or two successes, notably with the Motorola Razr i handset powered by an Atom-based SoC, most handsets continue to be based on ARM designs.
Announcing the agreement, Intel chief executive Brian Krzanich said: “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.”
Earlier this year, Intel announced a separate partnership with China-based firm Rockchip to develop and sell Atom-based SoCs for Android tablet systems.