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Qualcomm enters $280M joint venture with Chinese province

Posted: 18 Jan 2016 ?? ?Print Version ?Bookmark and Share

Keywords:server technology? integrated circuit? big data? data centre?

Qualcomm has deepened its Chinese relations by partnering with the provincial government of Guizhou in southwest China for a joint venture worth approximately $280 million (RMB 1.85 billion).

Officials from Qualcomm and Guizhou provincial government signed a strategic cooperation agreement to form the Guizhou Huaxintong Semiconductor Technology Co., Ltd (GHST). The joint venture will focus on the design, development and sale of advanced server chipset technology in China, which is the second largest country in the world for server technology sales, according to analysts.

"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," said Derek Aberle, president of Qualcomm. "This underscores our commitment as a strategic partner in China."

As part of the deal, the U.S. chipmaker will license its proprietary server chip technology and provide R&D processes to GHST to support the commercial viability and success of the new company.

The joint venture will be based at Guian New Area, with operations in Beijing.

Guizhou is the first to build an industrial cluster for big data development in China. Guian New Area is an important base for the development of the big data industry and will include a green data centre cluster of more than 2.5 million servers for companies including China Telecom, China Unicom and China Mobile.

In addition, Qualcomm will also establish an investment company in the province to serve as a vehicle for future investments in the country. The overarching agreement establishes a long-term commitment between the two parties to work closely together to identify and pursue business opportunities in Guizhou, Qualcomm said in a press release.

The announcement came on the heels of several other investments by Qualcomm in China, including Qualcomm's cooperation with Semiconductor Manufacturing International Cooperation (SMIC) to manufacture smartphone chips, investment into the SMIC Advanced Technology Research and Development (Shanghai) Corp equity joint venture and the creation of a $150 million USD China Investment Fund.

"The central government has attached great importance to development of the integrated circuit (IC) industry by formulating the IC Industry Development Outlook and setting up the National IC Industry Investment Fund to boost the development of the IC industry," said Qin Rupei, executive vice governor, Guizhou Provincial Government.

- Stephen Padilla

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