Qualcomm chips in $144 million to China joint venture

A visitor tries a Qualcomm's prototype virtual reality headsets during Mobile World Congress in Barcelona, Spain, February 28, 2017. [Photo/Agencies]

American chip giant Qualcomm has upped the ante in its joint venture in China, pouring another 1 billion yuan ($144 million) into Guizhou Huaxintong Semiconductor Technology in partnership with the local government.

The move brought the total investment in Huaxintong to 2.85 billion yuan. The joint venture was established in 2016 by Qualcomm and the Guizhou provincial government to make server chips.

Huaxintong chief executive officer Wang Kai told China Daily on Wednesday that the company had received another 1 billion yuan, the second phase of capital injection, from its two shareholders.

Qualcomm owns 45 percent of Huaxintong and the Guizhou provincial government holds the remaining shares.

Wang said the new deal had not changed the shareholder structure. He did not disclose how the extra cash would be used.

The Guizhou provincial government also confirmed the deal.

The move came after Huaxintong, the Guizhou-based company, opened a research center in Shanghai last year to step up research and development on chip design.

It also opened an operating center in Beijing last year. The joint venture is part of efforts by Qualcomm, which dominates the smartphone chip sector, to compete with Intel Corp on server chips.

Qualcomm president Derek Aberle said previously that Huaxintong expected to start shipping China-customized server chips about mid-2018.

"We want to enable the joint venture to build up its own capability and be able to take our technology and develop its own systems on chips for the China market," Aberle said.

According to Wang, more than half of Huaxintong’s employees are from other leading semiconductors and 70 percent of them have doctorates or master degrees.