After Miya Kong discussed the latest Intel-Rockchip announcement with China's industry insiders, we know the two companies have agreed on three points: X86 architecture, 3G modem license, and 14-nm capacity support.
What will Rockchip gain?
Rockchip also finds four main benefits in this deal:
- Getting 3G modem technology from Intel can substantially improve Rockchip's competitiveness. Based on the stats I've gathered, I see that Allwinner shipped around 48 million chips globally in 2013, while Rockchip delivered more than 40 million, and MediaTek around 21 million. Considering MediaTek's rapid growth in the market since last year, we expect the situation to elevate to a tripartite confrontation this year. This makes owning the 3G modem technology all the more important to Rockchip.
- Chinese fabless chip companies are beginning to sense limitations in the quality of resources they can get from the ARM ecosystem. ARM license fees are getting higher, the foundry process keeps getting upgraded, and the capacity of advanced processes are becoming much tighter. It's one thing if you are a Tier 1 fabless chip company like Qualcomm or Marvell. It's another thing if you are one of the many Chinese fabless chip suppliers. Rockchip hopes to avert the risk of being treated lightly by the ARM ecosystem. It also hopes to differentiate itself by establishing alternative resources for its products. For instance, Rockchip was the first Chinese company to license ARM Cortex-A12. But when Rockchip launched ARM's A12-based chip, ARM rolled out Cortex-A17, which put Rockchip in an awkward position.
- The competition among app processors will be eventually determined by the availability of capacities at foundries like Taiwan Semiconductor Manufacturing Co. (TSMC) and Globalfoundries. Intel's capacity will help secure Rockchip's competitiveness in the future.
- If the relationship goes well, Rockchip will get a chance to crack the smartphone market.
But the Chinese company also faces a few uncertainties. First, different corporate cultures and operational modes between the two companies could prove too problematic for cooperation and communication. Second, the X86 ecosystem is far from healthy. Last, Rockchip needs to build up its R&D forces for X86 technology, which includes both hardware and software. That's easier said than done.
Will Intel and Rockchip become a tour de force to break up China's never-ending cycle of cutthroat competition -- solely based on prices -- in the tablet market? We certainly hope so.
-- Miya Kong, a Chinese marketing execuitve at VeriSilicon in Shanghai and a longtime ovserver of China's electronics industry, shares her personal insights on China in her new blog series here.