Qualcomm Pledges 280 Mln USD Investment for Guizhou

Qualcomm has struck a US$280 million joint venture with the government of China’s Guizhou Province that will see the two organisations design server chips in China.

Qualcomm is reportedly setting up a $280 million joint venture with a Chinese company to develop chips for server systems.

The new company will be owned by both Qualcomm and Chinese officials from the Government of Guizhou Province.

The joint venture, cooperation agreement and formation of an investment company are important steps for Qualcomm as it deepens its cooperation and investment in China, said Derek Aberle, president of Qualcomm Inc. The Guizhou provincial government will have 55% ownership in the JV while the remaining stake will be owned by a subsidiary of Qualcomm. Previous year in October, the company sent samples of a server chip to potential clients.

Analysts see Qualcomm’s collaboration with the provincial Chinese government as a sign of the USA firm’s determination to diversify its range, expanding from mobile chips into the server chips market.

Companies such as Applied Micro Circuits Corp. and Advanced Micro Devices Inc. are trying to loosen Intel’s stranglehold with chips based on designs from ARM Holdings Plc, a technology that Qualcomm uses.

Qualcomm has earlier had collaborations in China such as the local manufacturing of its Snapdragon mobile processors by the Semiconductor Manufacturing International Corporation. The U.S.-based chip maker will also be establishing an investment arm in Guizhou through which future investments in China will be taken care of. In February 2015, it said it had made a compromise with China’s National Development and Reform Commission (NDRC) regarding the agency’s probe of Qualcomm under the country’s anti-monopoly law. Chandrasekher said that market will be a $15 billion opportunity for QCOM by 2020, including $6 billion from China. Qualcomm Incorporated includes Qualcomms licensing business, QTL, and the vast majority of its patent portfolio.