Intel to spend 9b yuan in China push
Intel Corp, struggling to break into the market for chips that run smartphones, will spend as much as nine billion yuan (HK$11.4 billion) on a stake in Tsinghua Unigroup.
Intel Corp, struggling to break into the market for chips that run smartphones, will spend as much as nine billion yuan (HK$11.4 billion) on a stake in Tsinghua Unigroup, owner of two chip designers on the mainland, to speed up its access to the world's largest mobile market.
Intel would take a maximum 20 per cent stake in the owner of Spreadtrum Communications and RDA Microelectronics, the company said in a statement. Spreadtrum will develop products jointly with Intel that will be marketed to its domestic phone-manufacturing customers from the second half of 2015. Tsinghua Unigroup is a state-funded corporation.
The investment is the latest move by chief executive Brian Krzanich to jump-start stalled attempts to get Intel chips into phones, a market dominated by rival Qualcomm.
The alliance is Intel's second with a mainland company aimed at spreading the use of Intel's mobile processors in a country where one service provider alone, China Mobile, has more subscribers than the population of the United States.
"China is now the largest consumption market for smartphones and has the largest number of internet users in the world," Krzanich said in the statement.
"These agreements with Tsinghua Unigroup underscore Intel's 29-year history of investing in and working in China."
Tsinghua Holdings, owner of Tsinghua Unigroup, is a state-owned corporation funded by Tsinghua University. Unigroup bought Spreadtrum in December for about US$1.7 billion, taking the company private.
Intel chose to make the investment because it wants a long-term strategic agreement. The nine billion yuan represented the value Intel saw in a long-term partnership, which would provide greater access to the mainland and to overseas markets when Chinese phone makers expanded internationally, said Americo Lemos, an Intel vice-president.
The world's biggest chipmaker is deepening its ties with the world's most populous country as other companies face challenges doing business there. Qualcomm, the largest maker of phone chips, is among businesses targeted in an antitrust investigation by the National Development and Reform Commission.
