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Chinese antitrust authorities have given the go-ahead to Qualcomm Inc. to press ahead with plans to form a joint venture in the country for the design of smartphone chipsets.
Qualcomm has received approvals to link up with state-owned Datang Telecom unit Leadcore Technology Co. and JAC Capital’s semiconductor investment center in Gui’an New Area in southwestern Guizhou province to form the JV, the State Administration for Market Supervision said in a statement.
The deal will combine Qualcomm’s and Leadcore’s advanced technologies and develop high-quality products for mobile communications consumers, said Qian Guoliang, general manager at Leadcore Technology. It will also leverage their respective customer resources and localization support capabilities, while initially focusing on the low- to medium-end global markets where most products are priced at around USD100.
The JV, known as JLQ Technology, will compete with Tsinghua Unigroup’s Spreadtrum Communications Inc. in China’s low-end consumer smartphone chipset sector. Given its absolute dominance in the high-end integrated circuit market globally, market insiders interpret the market diversification plan as an effort to improve relatively weaker-performing areas and gain a larger share in other regional markets.
The three parties first set out plans for the JV in May last year with a total investment of USD470 million (CNY3 billion). Leadcore Technology Co., Qualcomm, JAC Capital and Zhilu (Gui’an New Area) Strategic Emerging Industry Investment Center hold 24.1 percent, 24.1 percent, 34.6 percent and 19.0 percent stakes, respectively.
The approval coincides with the end of two-day-long talks in Beijing between Chinese and US officials aimed at tackling unfair trade practices, of which many are focused on the technology sector.
San Diego-based Qualcomm is still waiting for China’s antitrust regulator to approve its planned USD44 billion acquisition of NXP Semiconductors NV, based in the Netherlands. The deal is viewed as vital to the firm’s future development plans.
Source: yicaiglobal.com
