US-based semiconductor producer Intel is investing $1.5bn in a Chinese semiconductor venture, Spreadtrum Communications and RDA Microelectronics, in return for a 20% stake.
The venture is controlled by Tsinghua Unigroup, a state-owned company funded by Tsinghua University. Tsinghua Unigroup acquired Spreadtrum in December 2013 for $1.78bn and RDA in July 2014 for $907m, and has been establishing itself a force to be reckoned with in the mobile chip industry.
The venture will be manufacturing Intel-branded chips to be used in mobile phones and other electronics.
The investment follows May’s announcement that Intel was to co-operate with Rockchip, also a Chinese chip manufacturer, to use Intel’s designs in low-cost tablets running Android.
Both the investment and the partnership with Rockchip are strategically important for Intel, which has been unsuccessfully trying to break into the mobile market. It also provides Intel with a route into the Chinese mobile market, the biggest single market in the world.
This article first appeared in Global University Venturing, Global Corporate Venturing’s sister site.