US-based wireless technology manufacturer Qualcomm and the government of Chinese province Guizhou signed a strategic cooperation agreement and launched a joint venture dubbed Guizhou Huaxintong Semi-Conductor Technology yesterday.
As part of the agreement, Qualcomm will create an investment subsidiary in the province to conduct its future corporate venturing efforts in China. Qualcomm will join forces with the local government to identify potential investees in Guizhou.
The JV has received an initial funding commitment of RMB1.85bn ($280m) and will be 55% owned by the Guizhou government’s investment vehicle, while Qualcomm will hold the remaining 45%.
Guizhou Huaxintong Semi-Conductor Technology is aimed at China-based companies developing chipsets for servers. Qualcomm has agreed to license its server chip technology and will provide research and development processes to the JV.
The agreement was signed by company representatives including Qualcomm CEO Steve Mollenkopf and Qualcomm president Derek Aberle, as well as local government officials Chen Min’er and Sun Zhigang.
Anand Chandrasekher, senior vice-president and general manager of Qualcomm’s Datacenter Group, said: “This server technology joint venture is a win-win scenario for Qualcomm and our Guizhou partner and will yield mutual benefits for both sides as we together pursue a very large data centre opportunity in China.”