US chip giant Intel has ceased cooperation with Unisoc, a state-owned mobile chipmaker, following ongoing tensions between the world’s two largest economies and coming less than a year after the deal was announced.
The partnership was dissolved amid concerns that the technology transfer could cause problems in Washington, according to Nikkei, citing sources familiar with the situation. The deal between the two chipmakers was announced at the Mobile World Congress in February 2018.
The two companies planned at the time to jointly deliver a 5G smartphone solution leveraging Intel’s modem expertise that would roll out to the market in 2019. Intel was supposed to share its latest XMM 8000 series of 5G commercial multi-mode modems with Unisoc, China’s second-largest chip manufacturer, as large-scale 5G networks projects are constructed across the country.
A spokesperson from Intel China told TechNode that the two companies decided mutually to end the collaboration, which was “strictly a business decision.”
Separately, Unisoc stated that the collaboration “never started” and that the two companies “just made the deal,” according to Chinese media outlet, Yicai. Unisoc announced at the MWC this year that it is working on its own 5G modem chip “without help from Intel.”
The split comes as China-US tensions shift from trade imbalances to technology-related security risks. The most prominent example are the criminal charges brought against Huawei by the US government in late January for alleged theft of trade secrets from its former partner, mobile carrier T-Mobile.
A subsidiary of Tsinghua Unigroup under Tsinghua Holdings, a state-owned assets management corporation, Unisoc earned revenues of RMB 11 billion (around $1.6 billion) in 2018, second in size to Huawei subsidiary HiSilicon, based on figures from TrendForce.