(Adds comments from analysts, detail on agreement)
By Noel Randewich
SAN FRANCISCO May 27 Intel Corp said
on Tuesday it reached an agreement with Chinese mobile chipmaker
Rockchip to make chips for inexpensive tablets running Google
Inc's Android platform.
The deal teams Intel up with a chipmaker specializing in
low-end mobile devices that often cost less than $100 and are
popular in China and other fast-growing markets. This represents
a major move for the Santa Clara, California company that has
struggled to gain traction in smartphones and tablets.
The collaboration is unlikely to drastically increase
Intel's overall mobile chip business, but it shows the
chipmaker's determination to be successful in the mobile arena
at nearly any cost, said FBR analyst Chris Rolland.
"It speaks to (CEO Brian Krzanich) being willing to think
somewhat out of the box and be a little more flexible in his
approach," Rolland said.
Intel gains access to Rockchip's ability to quickly launch
inexpensive mobile chips as well as access to the company's
strong relationships with local Chinese manufacturers focused on
the country's fast-growing consumer market.
"They're absolutely bringing us speed and execution and
proliferation for us that would not otherwise get done,"
Krzanich said on a conference call. "They also bring these
relationships and partnerships that go well beyond what ours
With sales of high-end mobile devices losing steam in North
America, manufacturers have been turning their attention to
lower-end tablets and smartphones designed for consumers in
Under the agreement, Rockchip and Intel will make a
quad-core mobile chip using Intel's architecture and branding,
While Intel excels at developing processors for laptops and
desktop computers, it has less experience designing "system on
chips," or SoCs, that combine features like modems, wifi and
Fuzhou, China-based Rockchip and other mobile chipmakers
focus on making SoCs for smartphones and tablets. Those chips
typically include ARM processor technology that competes against
"It's to some degree an acknowledgement of Intel's limited
capability in SoCs and very limited presence in China,
particularly as you get cheaper and cheaper tablets," Ascendiant
Capital analyst Cody Acree said of the agreement with Rockchip.
Intel said the agreement with Rockchip does not include an
investment between the two companies.
Intel said the chip will include 3G connectivity and be
available in the first half of 2015.
Shares of Intel were up 1.22 percent at $26.60, in line with
trading levels ahead of the announcement.
(Reporting by Noel Randewich; Editing by Richard Chang and