American mobile chip giant Qualcomm is teaming up with a Chinese tech firm to set up an innovation laboratory to develop smart cars that connect to the so-called internet of things (IoT) in the mainland. The partnership with Thunder Software Technology and the local authority will see the research and development lab established in Chongqing, southwest China’s biggest city, according to a statement from the Chongqing government. Thunder Software jumped as much as 4 per cent on Wednesday morning on the Shenzhen Stock Exchange, before closing up 2.2 per cent at 42.48 yuan. Overnight in the US, Qualcomm shares advanced nearly 2 per cent to close at US$53.87 on the Nasdaq exchange. In after-hours trading, they continued to rise, climbing 0.5 per cent to US$54.15. The new centre, which the statement refers to as an “IoT-connected smart car collaborative innovation laboratory”, will be located in the so-called Xiantao big data ecological valley in the city’s Yubei District. China has become a core market in the global wave of development for IoT and connected smart cars Frank Meng, chairman, Qualcomm China Its aim will be to create an ecosystem for IoT and boost research and development into IoT connected smart cars in China. It is hoped it will attract more car makers and research institutions to establish their own facilities in the cluster and thereby foster further innovation. Its main areas of research will include intelligent cockpit and control systems, user interface and user experience, according to the statement. The IoT refers to the interconnection of computing devices such as electronics and sensors embedded in physical objects, enabling them to collect and exchange data. “China has gradually become a core market in the global wave of development for IoT and connected smart cars,” said Frank Meng, chairman of Qualcomm China, in the statement. “Chongqing is a metropolis with one of the biggest potentials for investment in western China. The city has speeded up its efforts in cultivating strategic emerging industries in recent years and has made notable progress. “We are pleased to strengthen our cooperation with Chongqing city and Thunder Software Technology, as well as the relevant ecosystem in China. We will use our industry-leading technology and help realise the future of internet of everything.” Wu Cunrong, executive vice-mayor of Chongqing, said the city will “do its best” to support Qualcomm and Thunder Software’s projects in the city and accelerate the development of artificial intelligence and information service. In the meantime, San Diego-based Qualcomm will assist in the development of a separate smart-car research institution led by Chongqing government and Thunder Software Technology. The plan for the laboratory came after Qualcomm and Thunder Software established a joint venture in February 2016 in Chongqing, aiming to speed up research and innovation in the IoT. The market size of China’s IoT industry is expected to exceed 1.5 trillion yuan (US$231.4 billion) by 2020, up from more than 900 billion yuan, according to a forecast by state-run China Economic Information Service last month.