The move is part of a cunning plan to boost the company's bid to diversify from mobile chips into the server chips market while at the same time proving to the Chinese it is not an evil patent troll who is making goods which provide backdoors to US spooks.
The chip maker will own 45 per cent of the joint venture, Guizhou Huaxintong Semi-Conductor Technology, and the Guizhou provincial government's investment arm will own the remaining 55 per cent. The initial registered capital of the joint venture will be about $280 million.
Qualcomm wants to enter the server CPU market with a customer processor chip built using the ARM architecture. It said in November that it would co-develop the technology with local Chinese companies.
It is not the first western company to try this approach with the Chinese. HP and Intel have both had a crack at doing the same thing Intel said in 2014 it was planning to invest in local chip companies for the design of mobile phone chips. Qualcomm itself has previously announced collaborations in China, including for the local production of its Snapdragon mobile processors by Semiconductor Manufacturing International Corporation.
The Qualcomm server chips joint venture will be registered in Guian New Area, Guizhou, with operations in Beijing. Qualcomm will license its server chip technology and provide research and development processes to the joint venture. Besides the joint venture, it will set up an investment company in Guizhou that will "serve as a vehicle for future investments in China," Qualcomm said.