Intel Buys 20 Percent Stake in Chinese Holding Company for SoCs

Intel (INTC) has poured $1.5 billion into Tsinghua Unigroup, a subsidiary of the Chinese government-backed Tsinghua Holdings, that controls fabless chip maker Spreadtrum and RDA Microelectronics, in a joint development deal to broaden the U.S. chip giant’s mobile devices portfolio and architecture in China and worldwide. Tsinghua Unigroup bought Spreadtrum for about $1.8 billion in December 2013. 

Intel’s $1.5 billion buys it a 20 percent stake in Spreadtrum in a work-together deal to jointly produce and sell system-on-a-chip (SoC) technology based on Intel’s architecture for new mobile devices supporting 2G, 3G and 4G wireless protocols that could arrive on the market sometime in 2015. At some point, the two companies may turn to jointly producing new SoC’s aimed at emerging markets.

Intel boss Brian Krzanich said the deal will “enhance our ability to support a wider range of mobile customers in China and the rest of the world by more quickly delivering a broader portfolio of Intel architecture and communications technology solutions.”

Krzanich has been saying for a while how important China is to the vendor, having already established a $100 million fund to underwrite innovations by Chinese companies in smart devices and striking a deal with Chinese fabless chip maker Rockchip to jointly produce an Intel-based, quad-core x86 Atom processor for entry-level tablets.

Americo Lemos, Intel’s platform engineering group vice president, told the New York Times that Spreadtrum’s ability to “produce large volumes fast” of SoC’s was key to the deal. He said Intel wants to “increase the cadence that we bring out new products.”

Zhao Weiguo, Tsinghua Unigroup chairman and president, said the deal with Intel spans design and development, marketing and equity investments.” He said the agreement signals “Intel’s confidence in the Chinese market and strong commitment to Chinese semiconductor industry, which will accelerate the technology development and further strengthen the competitiveness and market position of Chinese semiconductor companies.”