Intel is now planning to strengthen its presence in mobile phone market with more than a billion dollars investment. Intel will be investing $1.5bn in Tsinghua Unigroup to make low-cost SoC (system on a chip) for mobiles, with Intel’s branding and architecture. Tsinghua Group is a government-affiliated private organization, and controlled by Tsinghua University, Beijing. Intel and Tsinghua Unigroup has announced that both parties have signed a series of agreements to grow market of Intel-based mobile phones in China.
Intel has finalized many deals since Brian Krzanich took over the role of Intel’s new CEO, to make sure its chip technology gets wider market. Intel will hold 20% stake in Tsinghua Unigroup who also owns RDA Microelectronics and Spreadtrum. Both of them produce brilliant SoCs for mobile phones and tablets etc.
With a high demand for smartphones in the US and all around the world, manufacturers have also decided to enhance their reach in China. There is huge demand for smartphones under $150 in China.
Intel performs exceptionally well at developing processors for laptops and computers, but it has struggled a lot to establish its feet into phone market. After struggling to maintain its presence in the smartphone and tablet market, Intel has decided to partner with Chinese mobile chipmakers in the hope to regain their dominance in the market.
"Intel's new CEO has proven to be willing to take on new partnerships and approach new business opportunities that stray from prior conventions," said Suji Da Silva, who is an analyst at Topeka Capital Markets.
Their stock has increased 32% this year because of demand for personal computers. This deal might prove a turning point in Intel’s history, and would provide Intel a larger platform in the Chinese chip market.
"China is now the largest consumption market for smartphones and has the largest number of internet users in the world," Brian Krzanich said in a statement.
Under this new agreement, Spreadtrum will develop and sell a host of Intel architecture-based system on a chip. The products will hopefully be out in the market in the second half of next year. Spreadtrum is one of the chipmakers that specialize in "turnkey" smartphone platforms, which is easy for manufacturers to use in their smartphones and tablets etc.
"It has become a national priority of China to grow its semiconductor industry," said Tsinghua Unigroup Chairman Zhao Weiguo in a statement released by Intel on Friday.
Intel has been flexible about its chip-making process for the past few years; they have allowed other manufacturers to make their chips. Intel also confirmed the first chips from the Tsinghua project will come from a manufacturer hired on contract.
This collaboration between Intel and Tsinghua Unigroup covers from design and development to equity investments and marketing. China is the world’s biggest smartphone manufacturer, and this could prove profitable for Intel’s Business. According to Intel, the deal is subject to regulatory approval and other conditions.
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