Qualcomm Inc has formed a strategic business alliance with the Chinese government in a bid to establish its long-term commitment to the country. The chip-maker has pledged to invest $280 million in a joint venture with the government of Guizhou province to produce server chips for the domestic market.

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Representatives of Qualcomm in Beijing signed a strategic cooperation agreement with the government of Guizhou province in southwest China during a ceremony at the China National Convention Center on Sunday, Jan. 17.

The joint venture -- named Guizhou Huaxintong Semi-Conductor Technology Co. -- will focus on the design, development and sale of advanced server chipset technology in the country. The company is reported to be 55 percent owned by the Guizhou provincial government investment arm and the rest by a Qualcomm subsidiary.

The new venture will be based at a technology park near Guiyang, the provincial capital. According to Qualcomm and the provincial government, this business alliance will serve as a vehicle for future investments in China.

As part of the deal, Qualcomm will also license its proprietary server chip technology to the venture. The company will additionally support the research and development process, according to Derek Aberle, president of Qualcomm.

The acting governor of Guizhou Sun Zhigang said the partnership in an essential step in the advancement of China's semiconductor industry. He noted that it will also help to establish Guizhou a world-class chip-making site.

More so, the alliance will also boost the high-tech industries found in the province such as cloud computing and chip-making. This is expected to increase economic growth in the decades to come.

TagsQualcomm, Guizhou Huaxintong Semi-Conductor Technology Co, joint venture, Business Alliance