November 11, 2014 / 7:09 PM / in 3 years

Intel CEO sees China chip partners moving away from rival technology

SAN FRANCISCO (Reuters) - Intel Corp Chief Executive Brian Krzanich expects new semiconductor partners in China to migrate to the U.S. chipmaker’s architecture within a few years and give up on ARM technology more widely used in smartphones and tablets.

Intel CEO Brian Krzanich delivers his keynote address during the annual Consumer Electronics Show (CES) in Las Vegas, Nevada January 6, 2014. REUTERS/Robert Galbraith

Intel this year signed deals with Rockchip and Spreadtrum Communications to use Intel’s technology to make chips for low-cost smartphones and tablets aimed at China’s fast-growing consumer market.

Spreadtrum and Rockchip specialize in turnkey smartphone and tablet platforms that are easy for manufacturers to use. They typically design their chips with technology licensed from Britain’s ARM Holdings Plc, which competes against Intel’s technology.

While the agreements with Intel do not prevent the Chinese chipmakers from continuing to make ARM-based chips, Krzanich told reporters late on Monday he believes that within two or three years they will exclusively use Intel’s architecture.

With leading mobile chipmaker Qualcomm Inc offering high-end chips based on ARM and Taiwan’s MediaTek attacking the Chinese market with inexpensive chips also designed using ARM, adopting Intel’s architecture and cutting-edge factories offer a way to differentiate with better performance and features, Krzanich said.

“If you’re a small guy trying to compete, it’s tough to be in that battle.”

Intel was late to mobile and has rushed to make its technology more suitable for tablets and smartphones. While Intel excels at processors for personal computers, it has less experience designing low-power “system on chips” or SoCs, key components in mobile devices, which combine features including processors, Wi-Fi and memory.

Intel and Rockchip are working on an Intel-branded tablet SoC, with Rockchip contributing expertise on connectivity, graphics and its experience in China’s domestic market.

Spreadtrum, as part of a deal by Intel to buy 20 percent of its parent company for $1.5 billion, is working with Intel on SoCs expected out next year.

Since they are relatively small, both Chinese chipmakers probably do not have the resources to make separate chips based on Intel and ARM technology over the long term, Krzanich said.

With demand for smartphones cooling in the United States, manufacturers have increased their focus on China, where demand is strong for handsets priced under $150. Krzanich said Intel might partner with more companies there.

“We’re not done. China is the fastest growing market in the world,” he said.

Editing by Matthew Lewis

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