Qualcomm Forms Venture With Chinese Firm

By Eva Dou 

BEIJING-- Qualcomm Inc. struck a deal to help China's biggest semiconductor foundry upgrade its technology, as the U.S. chip maker seeks to improve its standing in the country following an antitrust investigation.

Chinese foundry Semiconductor Manufacturing International Corp. said Tuesday it will form a joint venture company with Qualcomm, Huawei Technologies Co. and Belgian chip research center Imec to develop advanced 14-nanometer chips.

Beijing is pouring billions into its semiconductor sector, as it seeks to decrease its dependence on U.S. technology for economic and security reasons. U.S. suppliers have sought to keep their place in the major market by forging partnerships with local companies.

Qualcomm and SMIC collaborated last year on the production of 28-nanometer chips. The smaller the number, the more advanced the chip.

Chinese antitrust authorities investigated Qualcomm last year for antitrust practices. The San Diego company agreed in February to settle for a $975 million fine and to reduce its royalty rates on handsets sold in China.

Other companies have struck partnerships in China in recent months as a way of easing official skepticism of foreign firms. Tsinghua Unigroup Ltd. in May said it would buy a 51% stake in Hewlett-Packard Co.'s China networking gear subsidiary H3C.

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