In an article on Forbes, it was reported that Intel Corporation (NASDAQ:INTC) is going to spend $1.6 billion to upgrade its chip making plants in Chengdu, a city in China. The company is looking to long-term prospects in China, which is a major player in the semiconductor business. Doug Young, the author of the article said that 10 years ago, Intel Corporation (NASDAQ:INTC) invested around $300 million in its Chinese plant. At that time, it was a low-end semiconductor production business but this investment was reported as a major step by Intel Corporation (NASDAQ:INTC) to step in the emerging markets. Some years later, the company doubled this investment.
Young said that Intel Corporation (NASDAQ:INTC)’s new project will be regarding mobile chips. PC chips, that was the biggest money earning business for Intel Corporation (NASDAQ:INTC) is now in problems. Intel Corporation (NASDAQ:INTC) failed to realize the important of smartphone chips years ago. Consequently, the market is led by Qualcomm, ARM, Mediatek and Intel is thriving hard to be in the race.
A local chip making giant, Unigroup has merged two companies. Intel has spent $1.5 billion to value the company around $7.5 billion and got 20% stake in the company. Intel Corporation (NASDAQ:INTC) is investing heavily in the Chinese markets amid the outburst of local smartphone giants like Xiaomi.
Young thinks that Tsinghua company will soon start making chips for smartphones based on Intel’s architecture. If Intel Corporation (NASDAQ:INTC) could sign a deal with Xiaomi on powering its smartphones, this could be the biggest and crucial success for Intel in the market.