U.S. chip giant Qualcomm Inc. has set up a joint venture with Chinese tech firm Thundercomm on Monday, Feb. 29, to focus on developing technologies that will be used in drones, virtual reality goggles and other smart devices which the U.S. company believes will be the next big thing after the smartphone boom, China Daily reported.
A statement released by Qualcomm and its Chinese partner Thunder Software Technology Co. Ltd., or Thundersoft, said products and technologies for local firms which are building the next-generation drones, robots, VR devices and wearables, will be supplied by Thundercomm.
Beijing-based Thundersoft said in its statement that it has a registered capital of 18.74 million yuan ($2.8 million) and will control nearly 82 percent of the joint venture, while an investment subsidiary of Qualcomm will take the rest of the new company's stake.
The report said that the joint venture will be located at the Fairy Peach Data Valley in Yubei District, in Chongqing Municipality. The inland mega city has been transformed as one of the world's largest manufacturing bases for smart devices in recent years, the report added.
Zhang Shutao, general manager of Thundercomm, said that intellectual patents from Qualcomm will be used by the joint venture.
"We will have a lot opportunities to work with Qualcomm in IP, the JV will find ways to help customers get access to Qualcomm's IPs," Zhang said.
Earlier this month, Frank Meng, chairman of Qualcomm China, told China Daily in an exclusive interview that Chinese startups are set to lead the world in innovation in an array of emerging sectors.
Meng added that Chinese tech firms are making technological advances ahead instead of waiting for ideas imported from overseas companies.
"Local vendors are coming up with gigantic amount of ideas that suit requirements of Chinese customers. Qualcomm wants to be a part of this new trend that will unlock another trillion-yuan market," Meng said.
Ma Longwen, an analyst from Changjiang Securities Co., said the new joint venture will be advantageous to Thundersoft in many areas, including drone making, smart automobile and VR.
"It requires a large number of high-end chips to make a drone, as global orders for drones reaching the highest level on record, the JV is facing a huge market demand because it is endorsed by Qualcomm technologies," Ma said.
Ma noted that although sectors such as VR and operating system used in automobiles are not big today, there is a potential growth of huge user base for it like smartphones did.
The report said that the establishment of Thundercomm was the first major China investment from Qualcomm since it set up a firm registered in Guizhou to manage its investments in China in January.
Qualcomm is moving its investment focus to inland provinces in relation to national strategies aimed at improving the economy of less-developed regions, taking advantage of the Internet and new technologies.