Intel will pay up to $1.5 billion for a 20 percent state in a Chinese venture that will design and make Intel-branded chips for mobile phones and other electronics.
The Chinese chipmakers Spreadtrum Communications and RDA Microelectronics are controlled by Tsinghua Unigroup Ltd., a state-owned company funded by Tsinghua University in Beijing.
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Intel is pushing for a larger share of China's growing mobile market, which is already the largest in the world.
The companies said Friday that Spreadtrum and Intel will create a new family of chips for wireless phones. Those chips should be available in the second half of next year.
The deal is expected to close in early 2015.
Shares of Intel Corp., based in Santa Clara, California, are trading near 52-week highs.