Qualcomm, Inc. (QCOM) Forms Joint Venture with China’s Guizhou Province


Qualcomm, Inc. (NASDAQ:QCOM) announced a joint venture and a strategic cooperation agreement with the provincial government of Guizhou in China.

The company also disclosed its plan to establish an investment arm in Guizhou, which will serve as a vehicle for its future investment in China, the world’s second largest market for server technology.

According to the company, the joint venture will be called Guizhou Huaxintong Semi-Conductor Technology Co Ltd., which will focus on the design development, and sale of advanced server chipset technology in China. It will have an initial capital of $280 million.

Qualcomm’s subsidiary owns 45% of the joint venture while the investment arm of the People’s Government of Guizhou Province owns 55% stake.  The joint venture is an integral part of the cooperation agreement between Qualcomm and the Chinese provincial government.

Qualcomm committed as a strategic partner in China

In a statement, Qualcomm president, Derek Aberle said the company worked actively with its partners in China for more than 20 years. The latest actions announced by the company are significant steps to deepen the level of its cooperation and investment in China.

“The strategic cooperation with Guizhou represents a significant increase in our collaboration in China. We are not only providing investment capital, but we also are licensing our server technology to the joint venture and assisting with R&D process and implementation expertise; this underscores our commitment as a strategic partner in China,” said Aberle.

A win-win scenario

On the other hand, Anand Chandrasekher, senior vice president and general manager, Qualcomm Datacenter Group, Qualcomm Technologies, believed that the joint venture is a win-win scenario for the company and the provincial government Guizhou as they pursue a huge data center opportunity in China.

“Qualcomm’s partnership with Guizhou on its industry-leading server chip technology is a strategic choice made by the world leader in wireless technology, and also a big opportunity for Guizhou to develop the IC industry. I believe the collaboration will certainly achieve fruitful results,” according to Qin Rupei, executive vice governor of Guizhou Provincial Government.

The provincial government of Guizhou is the first to build an industrial cluster for big data development in China.