Published in PC Hardware

Qualcomm gears up to make custom chinese chips

by on30 May 2016

The way to hop over the Great Wall

Qualcomm is preparing to produce its own custom chips for the Chinese market in a move to get around its problems with manufacturers and the government.

Aberle told the Wall Street Journal that Qualcomm had entered into a joint venture with the local government in Guizhou province to manufacture custom chips starting in the second half of 2016. According to Aberle, the Guizhou government owns 55 per cent of the venture, while Qualcomm owns the remaining 45 per cent.

The custom chips for the Chinese market will run servers and Aberle expects China’s server demand to dwarf that of the US. He said:

“This is really going to be the primary vehicle from which we build our data center business in China... We are actually trying to create the company that is going to be able to win the market here as opposed to just licensing old technology.”

Qualcomm had a year of difficulties in collecting royalties and cementing new licensing agreements following an investigation by the Chinese National Development and Reform Commission.  Then it got hit with a $975 million fine for violating the country’s antimonopoly law.

That started to turn around when it completed a 3G and 4G patent license agreement with Chinese smartphone company Xiaomi.

Qualcomm agreed to grant the electronics company a royalty-bearing patent license to develop, manufacture and sell 3G and 4G devices. At the time Xiaomi CEO Lei Jun said that the deal would ‘play an important role’ in advancing the company’s Mi product range.

It seems that Qualcomm has worked out that such deals are the way to the Chinese heart.

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