Qualcomm will start production of its custom chips for China next year (Photo : www.telecomlead.com)
The high-tech sector in Guizhou Province has received a boost as chipmaker Qualcomm Inc. on Sunday, Jan. 17, pledged a major investment by building a 1.85 billion yuan ($280 million) joint venture to produce server chips for the domestic market in the less-developed southwestern province, China Daily reported.
According to the report, the joint venture, named the Guizhou Huaxintong Semi-Conductor Technology Co., will be 55 percent owned by the Guizhou provincial government's investment arm and 45 percent by a Qualcomm subsidiary.
At a news conference in Beijing, Derek Aberle, president of Qualcomm, told media that the venture will focus on the design, development and sales of "advanced server chipset technology" in China.
The report said that the venture company will be based at a technology park near the provincial capital, Guiyang.
Aberle said that as part of the deal, Qualcomm will also license its proprietary server chip technology and provide research and development processes to the venture.
Sun Zhigang, the acting governor of Guizhou, said that as a major step for the country's semiconductor industry, the collaboration will also assist Guizhou to set up a world-class chipmaking plant as well as build up its high-tech industries such as cloud computing and chipmaking, which will help grow its economy in the coming decade.
"The partnership is a win-win deal for both Guizhou and Qualcomm," Sun said.
Xu Shaoshi, head of the National Development and Reform Commission, said that the partnership sets a good precedent for cross-border technological innovation as the key to economic growth.
"China is open to foreign investment. . . . We welcome more overseas investment flowing into China, especially in the western part of the country," Xu said.
Wu Lianfeng, vice president and chief analyst at research firm International Data Corp. China, said that joint ventures in China are expected to increase as more overseas technology companies will gain access to highly profitable government procurement deals.
