Intel to invest $1.5bn in Chinese government-owned semiconductor firm

Deal sees Intel take 20 per cent stake in Tsinghua Unigroup Ltd as firm looks to increase share in Chinese market

Intel is set to invest $1.5bn in Chinese government-owned corporation Tsinghua Unigroup Ltd in an effort to accelerate adoption of Intel-based mobile devices in China.

The deal - which is significant for Intel because China represents the fastest growing mobile device market in the world - will see the US firm take a minority stake of about 20 per cent of the holding company under Tsinghua Unigroup. Tsinghua Unigroup Ltd is a subsidiary of Tsinghua Holdings Co Ltd, a state-owned company affiliated to Tsinghua University.

The company also owns Spreadtrum Communications and RDA Microelectronics, two of China's leading semiconductor computer chip producers, both of whom produce chips used in smartphones.

As part of the deal, Spreadtrum Communications will produce and sell Intel Architecture-based system-on-chips, which will become available to Chinese consumers next year.

"China is now the largest consumption market for smartphones and has the largest number of internet users in the world," said Brian Krzanich, Intel CEO.

"These agreements with Tsinghua Unigroup underscore Intel's 29-year-long history of investing in and working in China," he continued.

"This partnership will also 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 added.

Zhao Weiguo, chairman and president of the Tsinghua Unigroup, also welcomed the partnership with Intel, describing the need for China to grow its semiconductor industry as a "national priority".

"The strategic collaboration between Tsinghua Unigroup and Intel ranges from design and development to marketing and equity investments, which demonstrate Intel's confidence in the Chinese market and strong commitment to Chinese semiconductor industry," he said.

The deal will "accelerate the technology development and further strengthen the competitiveness and market position of Chinese semiconductor companies", he added.

The companies expect Intel's investment to close in early 2015.

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