this is why china is still the place to be.......
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Intel, Qualcomm Eye China's Booming Mobile Market
By MICHAEL PERRAULT, INVESTOR'S BUSINESS DAILY
Posted 12/10/2014 04:35 PM ET
Even as China takes steps to decrease its dependence on chips manufactured outside the country, U.S. chipmakers Intel and Qualcomm are pursuing potentially big opportunities there.
Intel (NASDAQ:INTC) expects regulatory approval early next year for its deal to pay roughly $1.5 billion for a 20% stake in Tsinghua Unigroup, a Chinese state-affiliated private equity group that owns chipmakers Spreadtrum Communications and RDA Microelectronics.
This follows an Intel partnership with Chinese chipmaker Fuzhou Rockchip Electronics, announced in May.
Attendees at this summer's Computex Taipei expo inspect a hard drive powered by an Intel Atom processor.
Attendees at this summer's Computex Taipei expo inspect a hard drive powered by an Intel Atom processor. View Enlarged Image
Meanwhile, Qualcomm (NASDAQ:QCOM), still working to resolve a year-old investigation by Chinese antitrust authorities into its licensing practices, has signed up scores of Chinese companies to use its chip designs.
"Seventy Chinese vendors use (Qualcomm's) 4G LTE patents, and 120 vendors use its 3G patents in China," Summit Research Partners analyst Srini Sundararajan told IBD. "On the server market, Qualcomm is working with 90 different companies."
Intel and Qualcomm are bolstering their presence as China is intent on producing a domestic challenger that can match them, Sundararajan says.
"China in 2013 consumed more than half of the world's semiconductor output, with domestic demand at around $150 billion," he said. "With China's chip industry producing $42 billion, there is a long catch-up that Beijing would like to see happen."
Intel's joint ventures are "strategic investments designed to get them into tablets and smartphones," said ABR Investment Strategy analyst JoAnne Feeney.
Hedging Its Bets
UBS Investment Research analyst Stephen Chin sees Intel's Chinese partnerships as part of a broader strategy to defend its core PC business while also "hedging for the possibility of tablets becoming the main computing device in emerging market countries or where cost sensitivity is high."
Demand for smartphones has cooled in the U.S., so manufacturers have increased their focus on China, where demand is robust for handsets priced under $150.
Nearly 500 million smartphones will be sold next year in China, market research firm IDC forecasts in a report released this month. That's roughly one-third of global sales and triple the U.S. forecast.
Despite slowing economic growth, China's impact on information and communication technology markets will jump next year, accounting for 43% of all spending growth in those sectors, IDC says.
Intel is looking to Chinese partners who will use its technology to make chips for low-cost smartphones and tablets instead of licensing chip designs from rival ARM Holdings
