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Intel Corporation (INTC)’s $1.5 Billion Bet on Chinese Chip Manufacturers

Intel Corporation (NASDAQ:INTC) has been trying to mark its territory as a mobile chip manufacturer, but its efforts have been in vain so far. With an intention to change just that, the world’s largest semiconductor company  is spending  $1.5 billion for a 20% stake in the Chinese Tsinghua Unigroup, according to an article on Want China Times.

Intel Corporation (NASDAQ:INTC)

Tsinghua Unigroup, which gets its funding from its namesake university in Beijing, will manufacture Intel Corporation (NASDAQ:INTC) branded chips for mobile phones and other electronics.

Both the Chinese government and the semiconductor company are set to benefit from this venture, of course provided that it succeeds. China is seeking to set up its own platform for the processor chips. Currently it is dependent on other companies for that service, one of which is the formidable ARM Holdings plc (LON:ARM), according to the article.

ARM will also be Intel Corporation (NASDAQ:INTC)’s major competitor in the mobile processor business. The London based company is even said to have boasted that 95% of the mobile processors in the world are based on its techniques, according Watch China Times. Moreover, it is also the leading mobile chip processor company by China’s market share.

Intel Corporation (NASDAQ:INTC) is interested in changing just that. By partnering with a company that is funded by the state, it will definitely receive a lot of support in terms of gaining market share at least in China, and China is a huge smart phone market. It is definitely a smart move, but a lot lies in the hands of Tsinghua Unigroup’s employs to come up with the innovation that is expected in a multibillion dollar smart phone industry.

Technology stocks have been under the gun lately owing to fears of a slowing down global economy. However, the stock is up 0.35% as of now and is trading at $32.02.

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