As you may have heard, Intel is making some interesting moves into the China mobile market. At first it had me a bit puzzled but I had some lengthy discussions about it during ARM TechCon last week so I’m ready to start writing. Spoiler alert: This will be pro Intel so please sit down and take some deep breaths before reading.
The first interesting news was the Intel investment in Rockchip back in May of this year. We have written quite a bit about Rockchip on SemiWiki and I have heard even more during private conversations. Great company but they face stiff competition from a dozen different SoC companies big and small including Spreadtrum. If not for the Intel deal my understanding is that Rockchip would have faced an asset sale. With Intel’s backing however, I see differentiation and a huge upside, absolutely.
“The strategic agreement with Rockchip is an example of Intel’s commitment to take pragmatic and different approaches to grow our presence in the global mobile market by more quickly delivering a broader portfolio of Intel architecture and communications technology solutions.” Intel’s CEO Brian Krzanich.
The Spreadtrum deal is even more interesting. Intel took an equity position in the holding company (Tsinghua Unigroup) which holds Spreadtrum Communications and RDA Microelectronics.
“China is now the largest consumption market for smartphones and has the largest number of Internet users in the world,” said Brian Krzanich, Intel CEO. “These agreements with Tsinghua Unigroup underscore Intel’s 29-year-long history of investing in and working in China. This partnership will also enhance our ability to support a wider range of mobile customers in China and the rest of the world by more quickly delivering a broader portfolio of Intel architecture and communications technology solutions.”
Intel is reportedly investing $1.5 billion into Tsinghua Unigroup for a 20% stake. Interestingly enough Spreadtrum and RDA were taken private by Tsinghua just last year for $1.78 billion so the math doesn’t really work here. Dealing with the Chinese Government has always perplexed me so I’m interested to see how this plays out. And what about the Rockchip relationship? Rockchip and Spreadtrum are fierce competitors. Hopefully I can get more information during my next trip to Shanghai. Face-2-face communication is much more reliable than Googling around and making things up.
Also read: The Apple Samsung TSMC Intel 14nm Mashup!
A while back I gave Intel Custom Foundry some very good advice: Invest in the fabless semiconductor ecosystem because unless Intel is an integral (non-threatening) part of the ecosystem they will not succeed. One suggestion I made was to buy fabless companies to fill Intel fabs (I believe I mentioned Mediatek and Broadcom). In this regards the Spreadtrum investment is brilliant considering the China market has the biggest upside for Intel Custom Foundry.
Granted, TSMC manufactures the majority of mobile chips today and the Chinese Government does have a significant stake in SMIC, but based on my experience with SMIC they have no chance at 28nm, 20nm, or 14nm. From what I was told, SMIC licensed the IBM gate-first HKMG 28nm process only to change it to gate-last to better accommodate TSMC designs for second sourcing. This failed miserably and now SMIC is working on 28nm FD-SOI which means they will have to change back to gate-first. So the gates of China are open to Intel Custom Foundry for mobile devices and I hope they succeed for the greater good of the fabless semiconductor industry.
My next trip to Asia is at the end of this month so please let’s discuss this in the comment section so I can get clarification during my trip: