The joint venture, with initial registered capital of RMB 1.85 billion (approx. $280 million USD), will be 55 percent owned by the Guizhou provincial government's investment arm and 45 percent owned by a subsidiary of Qualcomm.
The joint venture will focus on the design, development and sale of server chipset technology in China.
In addition, Qualcomm also will establish an investment company in Guizhou that will serve as a vehicle for future investments in China.
"The actions announced today are important steps for Qualcomm as we deepen our level of cooperation with, and investment in, China. We have worked actively with our partners in China for more than 20 years; however, the strategic cooperation with Guizhou represents a significant increase in our collaboration in China," said Derek Aberle, president of Qualcomm Incorporated. "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; this underscores our commitment as a strategic partner in China."
Guizhou Huaxintong Semi-Conductor Technology Co., Ltd. will be registered in Guian New Area, Guizhou, with operations in Beijing. As part of the deal, Qualcomm Technologies, Inc. will license its proprietary server chip technology and provide R&D processes to the joint venture to support the commercial viability and success of the new company. Guizhou Province is the first to build an industrial cluster for big data development in China. Guian New Area in Guizhou is an important base for the development of the big data industry and will include a green datacenter cluster of more than 2.5 million servers for companies including China Telecom, China Unicom and China Mobile.
Qualcomm is one of many challengers seeking to dislodge Intel in the market for processors that run data center machines. Intel, the biggest overall semiconductor maker, has squashed all opposition and enjoys more than 99 market share. It?s able to charge more than $7,000 for some models, more than seven times the price of even its most expensive desktop offering.
Companies such as Applied Micro Circuits. and Advanced Micro Devices. are trying to loosen Intel?s stranglehold with chips based on designs from ARM Holdings Plc, a technology that Qualcomm uses.