Chipmaker Qualcomm and the provincial government of Guizhou in China on Sunday unveiled a $280 million joint venture for the design, development and sale of advanced server technology.
The US-based global semiconductor company signed a strategic agreement with the Guizhou province government and announced a joint venture with Huaxintong Semi-Conductor Technology Co Ltd with initial capital of 1.85 billion renminbi (approximately $281 million) Reuters reported.
"Qualcomm will establish an investment company in Guizhou that will serve as a vehicle for future investments in China", the provincial government and the company said in a joint statement.
Derek Aberle, president of Qualcomm Inc, said the company wants to "deepen its cooperation and investment in China". Thus, cooperation agreement, joint venture and formation of an investment company will be important for the company.
Qualcomm was reportedly licensing its server technology with the help of research and development and would also supply expertise to implement the venture, Reuters added in its report.
"This underscores our commitment as a strategic partner in China," Aberle said. Under the joint venture, Guizhou would own 55% of the new company and 45% will be owned by Qualcomm subsidiary, according to a report by Venture Beat.
The company plans to make ARM-based processors for servers in data centres.
Last October, the company had announced that it conducted a live demo of its server development platform. It would also collaborate with chip-making companies Xilinx and Mellanox. This would give China a chance to build its own chip industry.
"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 center opportunity in China," said Anand Chandrasekhar, Senior Vice President and General Manager for Qualcomm Data Center Group, in a statement, Venture Beat report added.