Intel Corp. announced at the end of September it would invest $1.5 billion into Chinese chip maker Tsinghua Unigroup Ltd., doubling down on its recent efforts to insert itself in China’s mobile market, reports the New York Times. The new investment follows Intel’s announcement of its partnership with another Chinese chip maker, Fuzhou Rockchip Electronics Co., in May.

In this latest deal, Intel will buy 20 percent of Tsinghua—a state-owned firm that owns Spreadtrum Communications and RDA Microelectronics, China’s second and third largest chip makers, according to the Wall Street Journal.

In its announcement, Intel said the two companies will jointly develop Intel-based chips with features like modems and wireless capability for use in mobile phones. They aim to create a “system on a chip”—or SOC—designed for technically advanced yet inexpensive mobile phones that target emerging markets including China—now the world’s largest mobile market in terms of users.

“Strategically, this is a long-term arrangement to develop a range of SOCs for the mobile market,” Americo Lemos, vice president of Intel’s platform engineering group, said to the New York Times. “Spreadtrum has demonstrated they can produce large volumes fast, and we really want to increase the cadence that we bring out new products.”

Tsinghua said the deal will also include product design, development, and marketing—and will bolster the Chinese chip industry overall, reports the Journal article. Company chair Zhao Weiguo called the development of this Chinese industry “a national priority.”

(Photo by redjokerx via Flickr)

Posted by Ellen Huber