One of China's most advanced semiconductor foundries Semiconductor Manufacturing International Corporation is partnering with Qualcomm to develop and manufacture 28nm process tech and wafer services in the Asian giant's market. The goal is to deliver Qualcomm Snapdragon processors.
As a global leader in 3G, 4G and next generation wireless tech, the partnership between Qualcomm and SMIC should help to increase the speed at which SMIC's 28nm is developed and put into the market. It should also give Qualcomm the opportunity to locally produce the wafers.
The two players are not new to working together, as they have developed power management, wireless and connectivity IT products. But the new relationship goes a step further into the manufacturing sector and should help SMIC grow its own offerings in wafer manufacturing through the support and expertise of Qualcomm and its Snapdragon portfolio.
The move is seen as a major boost for the chipmaker and its Chinese partner ahead of major tech companies' launching a plethora of new products later this fall and into the holiday season.
"You're going to have an iPhone launch, then holiday selling season. There could be a pretty substantial increase in wafers for back half (of 2014)," FBR analyst Chris Rolland said.
The news also comes as Beijing continues to push out new efforts to bolster its economy and the technology sector has become a main development goal for the country. Still, Qualcomm has faced a number of issues in China, including being accused of overcharging and abusing its position in the market, amidst reports suggesting it could face a $1 billion fine if the accusations are taken further.
SMIC, according to research firm IC Insights, is the fifth largest contract chipmaker in the world.
Still, SMIC appears optimistic about the new partnership.
"We are delighted to enter this collaboration with Qualcomm Technologies since this marks a significant milestone on the readiness and competitiveness of SMIC's 28nm process technologies," said Dr. Tzu-Yin Chiu, chief executive officer and executive director, SMIC.
"This step forward demonstrates SMIC's capabilities and commitments on bringing up the needed advanced node technologies for addressing customers' demands and product roadmaps. With Qualcomm Technologies' support, we are confident that our 28nm technologies will become one of the most important growth drivers for the company. We expect that the 28nm product life cycle longevity will exceed previous nodes, which will help better position SMIC to service the needs of Qualcomm Technologies, as well as others."
