• Qualcomm CEO Steve Mollenkopf attends the "Qualcomm Strategic Venture Investment in China" press conference.

Qualcomm CEO Steve Mollenkopf attends the "Qualcomm Strategic Venture Investment in China" press conference. (Photo : Getty Images)

As the number of powerful chips coming out of China grows, a joint venture between Qualcomm and Huaxintong Semiconductor Technology started developing a new server chip based on ARM technology.

Derek Aderle, the president of Qualcomm, said that the joint venture is "now busy developing a customized server CPU product based on our technology and designs for the China market."

Like Us on Facebook

Other companies are also pursuing the development of custom chips for the Chinese sever market. Suzhou PowerCore is developing a CPU that is based on the Power architecture of IBM. Advanced Micro Devices has also created a joint venture in order to create a Chinese 32-bit server chip.

Chipmarkers are making a run at China's hardware market, which creates a big opportunity for data center technologies.

Chinese companies like Alibaba and Tencent are establishing huge data centers for cloud and machine-learning services like Facebook and Google in the U.S.

The Chinese market has its quirks though. Companies in China prefer to purchase hardware from local vendors over foreign ones. This is due to lower prices and lower potential of high-risk national security issues.

The long-term goal of China is to be self-reliant in the hardware market. It currently has TaihuLight, the world's faster supercomputer.

"The Chinese have been transparent about their desire to have a strong, indigenous semiconductor industry because they have spent so much importing this stuff," said Nathan Brookwood, principal analyst at Insight 64.

Qualcomm announced the Centriq 2400 late last year. It is the first 48-core server chip and considered the best ARM chip yet. ARM servers are virtually nonexistent now, and ARM servers are still in the testing stage in China. This gave Qualcomm and ARM a huge opportunity to grow in the server market.

Huaxintong is a separate company from Qualcomm. It can either take Qualcomm's technology then customize the CPU for local customers, or it could create an high-performance ARM chip by cramming many ARM CPU cores together which will allow them to compete with Intel's Xeon Phi.