Deal to pitch Intel against industry leader Qualcomm.
Intel is investing $1.5bn to buy a minority stake in two Chinese mobile chipmakers as part of its efforts to bolster its presence in the fast-moving tablet and smartphone market.
The US chipmaker will buy 20% of Tsinghua Unigroup, which owns Spreadtrum Communications and RDA Microelectronics – both chip developers for mobile devices.
The two companies have also agreed to work together to increase the adoption for Intel-based mobile devices in China and jointly develop Intel Architecture and communications-based systems for mobile phones.
Tsinghua Unigroup chairman and president Zhao Weiguo said: "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."
Intel aims to compete with chip-making industry leader Qualcomm at a time when the latter is facing charges in China for anti-trust violations.
Spreadtrum will initially deploy designs developed by Intel, and later on work together to create new systems on a chip, primarily targeted at low cost smartphones in developing countries.
Intel CEO Brian Krzanich said: "China is now the largest consumption market for smartphones and has the largest number of internet users in the world.
"This partnership will 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."
Intel would build its systems on a chip at foundries of the Taiwan Semiconductor Manufacturing as the US chipmaker does not have semiconductor manufacturing facilities in China.
The US chipmaker’s investment in the Chinese companies is expected to close next year and Intel architecture-based systems on chips will be available in the markets from the second half of that year.