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Intel to invest $1.5 billion in Chinese mobile chip makers


Intel Corporation (NASDAQ:INTC) will be investing in growing mobile chip makers as the company focuses on the development of mobile chip making. The Beijing government aims to develop a serious competitor against Qualcomm and Samsung who are major suppliers of chips in the country.intel

China is increasingly encouraging cross-border mergers and co-operation agreements as a part of its industrial policy with main interest in the field of semi-conductor manufacture and design. The agreement was signed in August by Intel Chief executive Brian Krzanich in Beijing and the investment will provide a boost for China’s chip manufacturing capabilities. The country is highly dependent on chips from Qualcomm and Samsung as the latest processors require them.

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“We’ve entered an inflection point where the government policy has started to work, it’s starting to help the local semi-conductor industry,” said Leping Huang, Nomura analyst.

Yang Xueshan, deputy chief of China’s Ministry of Industry and Information Technology (MIIT) pushed the deal during the visit of the CEO which was unveiled on Sep. 26. Intel will hold a 20 percent stake in Spreadtrum Communications and RDA Microelectronics through shares in a Tsinghua University holding company which will help in the manufacture and development of chips. Intel spokesman John Mandeville declined to comment.

China, being the biggest smartphone industry will also focus on production of chips while it will provide an opportunity for Intel to compete with San-Diego based Qualcomm and South Korea’s Samsung. With the agreement the country can reduce the huge import of chips that are needed for the manufacture of smartphones, tablets and other devices. The government on its part is in the process of improving the information technology industry in the country after the reports about US surveillance program PRISM.

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