Qualcomm and Guizhou Province of China have formed a joint venture to design and sell server chips.
The joint venture called Guizhou Huaxintong Semi-Conductor Technology is established with an initial capital of $280m. The Guizhou provincial government will have 55% ownership in the JV while the remaining stake will be owned by a subsidiary of Qualcomm.
The focus of this joint venture is to design, develop and mass produce advanced server chipset technology in China.
Qualcomm president Derek Aberle said:: "The actions announced today are important steps for Qualcomm as we deepen our level of cooperation with, and investment in, China.
"We have worked actively with our partners in China for more than 20 years; however, the strategic cooperation with Guizhou represents a significant increase in our collaboration in China."
"We are not only providing investment capital, but we also are licensing our server technology to the joint venture and assisting with R&D process and implementation expertise; this underscores our commitment as a strategic partner in China."
Guizhou Executive Vice Governor Qin Rupei said: : "The central government has attached great importance to development of the integrated circuit (IC) industry by formulating the IC Industry Development Outlook and setting up the National IC Industry Investment Fund to boost the development of the IC industry.
"Qualcomm’s partnership with Guizhou on its industry-leading server chip technology is a strategic choice made by the world leader in wireless technology, and also a big opportunity for Guizhou to develop the IC industry. I believe the collaboration will certainly achieve fruitful results."
Qualcomm will provide licenses of its proprietary server chip technology and facilitate R&D processes to the joint venture. This news comes at a time when Qualcomm is making investments in China.
Investments have been made with Semiconductor Manufacturing International Cooperation (SMIC) for manufacturing smartphone chips, as well as the creation of a $150m China Investment Fund.