Qualcomm ups ante with fresh funds for Guizhou venture

A visitor experiences a virtual reality headset powered by a Qualcomm Inc Snapdragon 835 processor at the 2017 Consumer Electronics Show in Las Vegas, Nevada, on Jan 6. [Photo/Agencies]

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

The move brought the total investment in Huaxintong, which is based in Guizhou's capital Guiyang, to 2.85 billion yuan. The joint venture was established in 2016 by Qualcomm and the Guizhou provincial government to make server chips.

Wang Kai, CEO of Huaxintong, said in an interview with China Daily in Beijing on Wednesday that the company had received another 1 billion yuan, the second phase of a capital injection, from its two shareholders.

Qualcomm owns a 45 percent stake in Huaxintong, with the Guizhou provincial government accounting for the balance.

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

The move comes after Huaxintong 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 a broad effort by Qualcomm, which dominates the smartphone chip sector, to compete with Intel Corp in server chips.

Qualcomm President Derek Aberle said in an earlier interview with China Daily that Huaxintong expected to start shipping its China-customized server chips around mid-2018.

According to Huaxintong's Wang, unlike previous ventures when foreign companies brought outdated technology to China, Huaxintong will tailor-make chips for the China market on the basis of Qualcomm's latest technology.

He said over half of Huaxintong's employees are from other leading semiconductor producers and 70 percent of them are doctorate or master degree holders.