Qualcomm and TDK To Set Up Radio Frequency Chip Project
Qualcomm is tying up with TDK for setting up a radio chip venture.
Qualcomm is collaborating with TDK Corporation of Japan for the creation of a Singapore-based joint project that would manufacture components for the expanding market for ‘radio frequency’ chips used in drones, cars, cars, and handsets.
Qualcomm would invest around $1.2bn and TDK would carve out its manufacturing assets, design and related patents, into the attempt. The American chip manufacturer would own 51% of the new enterprise, which would be called RF360 Holdings, and get the option for purchasing the stake of TDK later. The worth of the total transaction is $3bn.
Electronic components convert radio waves into signals that are then converted into data with the help of semi-conductors found within electronic products. The market for these components would expand by 13% per year to around $18bn by 2020, partners told.
Cristiano Amon, who is responsible for heading the Qualcomm chip division, revealed that collaboration with TDK, which is known for specializing in filters, would permit Qualcomm to provide modules containing all the components that smartphone manufacturers need within a single comprehensive package.
Cristiano is trying to seek new areas for the growth of organization’s chips as the company is facing more competition in its core microprocessor and modem business, slowing down the revenue growth. Qualcomm, which recently announced the Audi of Volkswagen AG would use its processors inside automobiles, is also making efforts to enter the market for computer servers and install its chips into various complex machines, including robots and drones.
“You have to deliver the economies of scale to the industry. Providing baseband all the way to the antenna is going to provide significant growth.” Cristiano told.
TDK increased by 5.5%, its largest gain in 2 months, to 7080 Yen in Japanese capital, Tokyo. The project would push the company into businesses like automotive applications, drones and robotics, it stated. The chip manufacturer’s stock price declined less than 1% to $46.10 in trade close in New York on Wednesday.
The announcement affected the shares of competitors of RF technology. The share price of Sky Solutions decreased by almost 6.7%, whereas Avago technologies, which is taking over Broadcom Corporation to turn itself into a larger competitor of Qualcomm, decreased by 5.1%. Similarly, Qorvo decreased by 9.8%
In other news, Bloomberg reports that Samsung has taken the decision to reuse Qualcomm’s most powerful chips in its new smartphones 12 months after shifting away from its products. Their representatives have refused to share their views regarding plans. Samsung, which would roll out its latest models in February, would continue to use its processors in 50% of that lineup, whereas phones for US and China mostly using the Snapdragon.
