Qualcomm farms out cell phone, power ICs to SMIC

July 31, 2006 – Wireless developer Qualcomm Inc. has signed a deal with Semiconductor Manufacturing International Corp. (SMIC) to produce chips for the firm’s 3G wireless and power management ICs, using a specialized BiCMOS process technology at its 200mm fab in Tianjin, China.

The deal continues Qualcomm’s push into the Chinese market, as well as allowing the company to “to further streamline our operations, shorten the development cycle and focus on our core technology offerings,” stated Sanjay Jha, president of Qualcomm CDMA Technologies. Qualcomm’s investments in China include a $100 million pledge in mid-2003 to fund startups working on CMDA-based applications and services, and a new company formed earlier this year, TechFaith Software China Ltd., to develop application software for mobile devices.

The move also represents the latest business for SMIC’s Tianjin operation. Just a few weeks ago the foundry closed a $300 million loan facility (double the proposed amount) with a group of Chinese banks to help expand the former Motorola/Freescale MOS-17 wafer facility, which SMIC acquired in 2003. SMIC also recently got the Hubai provincial government to build a new 300mm fab that the foundry will manage (but now own outright), and has closed a five-year, $600 million loan with a consortium of international and Chinese banks to support its operations in Shanghai, where it has three 200mm facilities and reportedly wants to add a 300mm fab.


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