Intel Teams Up With China’s Rockchip on Chips for Tablets

Intel Corp. (INTC), struggling to break into the market for chips that run tablets, is teaming up with China’s Fuzhou Rockchip Electronics Co. on a new product for mobile devices.

The chipmakers signed an agreement to jointly offer a quad-core processor and integrated modem called Sofia, which will be available in the first half of 2015, Intel said today in a statement. Rockchip will market the chip to its Chinese customers, Intel Chief Executive Officer Brian Krzanich said on a conference call. The U.S. company isn’t investing in Rockchip or providing financial support, he said.

Intel’s partnership with Rockchip, which now sells chips based on ARM Holdings Plc’s rival technology, is an effort to jump-start its entry into the growing market for tablets in China, now dominated by smaller local companies including Rockchip and Allwinner Technology Co. The agreement will produce chips designed for inexpensive tablets running Google Inc.’s Android operating system.

Santa Clara, California-based Intel will get faster access to Chinese customers, and will contribute to the design of a chip that’s tuned to meet these clients’ needs, Krzanich said. The new product will be manufactured by Taiwan Semiconductor Manufacturing Co. (2330) until the end of next year, when Intel will begin a shift to its own plants, he said.

“By partnering with them, we’re getting a product out that’s targeted very specifically for these tablet designs that wouldn’t probably otherwise get onto our road map,” Krzanich said. “They’re bringing a speed and execution and proliferation that would otherwise not get done.”

Intel’s Position

Of the 88.3 million tablet processors shipped in the fourth quarter of 2013, Rockchip sold 9 million, according to market researcher IDC. Allwinner accounted for 18.2 million, more than three times what Intel, the world’s largest chipmaker, shipped in the same period.

Rockchip remains an ARM partner and technology licensee, said Phil Hughes, a spokesman for the U.K.-based chip designer.

“While ARM takes all competition seriously, we remain confident that the ARM ecosystem continues to offer the most highly integrated and optimized portfolio,” he said.

Intel shares rose 1.6 percent to $26.71 at the close in New York. The stock has gained 12 percent in the past year.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Jillian Ward

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