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Intel Invests $1.5 Billion for Stake in Chinese Chip Makers

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Intel Invests $1.5 Billion for Stake in Chinese Chip Makers

Intel will invest $1.5 billion for a minority stake in two Chinese mobile chip makers. Indonesian youth walk past an Intel sign during the Digital Imaging expo in Jakarta in this March 5, 2014, file photo. Reuters

Intel will invest $1.5 billion for a minority stake in two Chinese mobile chip makers. Indonesian youth walk past an Intel sign during the Digital Imaging expo in Jakarta in this March 5, 2014, file photo. Reuters

Intel Corp. INTC -1.76% said Friday that it would invest 9 billion yuan ($1.5 billion) for a minority stake in two Chinese mobile chip makers, highlighting the Silicon Valley giant’s efforts to gain traction in the tablet and smartphone market.

Intel said it would buy about 20% of China’s Tsinghua Unigroup Ltd., which owns Spreadtrum Communications and RDA Microelectronics that make computer chips for mobile devices. Tsinghua Unigroup is controlled by Tsinghua Holdings Co., a state-owned company funded by Tsinghua University in Beijing.

Intel Chief Executive Brian Krzanich said in a statement that the investment would allow Intel to support a wider range of mobile customers in China using its technology. Intel, which has long dominated sales of chips for personal computers, has struggled to popularize its technology for tablets and smartphones.

Under the deal, Spreadtrum and Intel will create and sell a new line of Intel-based chips.

Tsinghua Unigroup announced acquisitions of Spreadtrum and RDA Microelectronics last year for $1.78 billion and $907 million, respectively, in a move that took both companies private.

Originally posted on The Wall Street Journal 

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