China-based business group Tsinghua Unigroup has acquired China-based handset IC design houses Spreadtrum Communications and RDA Microelectronics for US$1.78 billion and US$910 million respectively in a bid to combine the latter two's technological resources to compete with Qualcomm and Taiwan-based IC design house MediaTek.

　　Qualcomm has become the dominant supplier of chip solutions used in mid-range to high-end smartphones for China-based vendors and so has MediaTek done for chip solutions used in mid-range to entry-level models, industry sources indicated. Therefore, China-based handset vendors and ODMs are expected to welcome the combination of Spreadtrum and RDA through Tsinghua Unigroup's acquisition to compete with Qualcomm and MediaTek, the sources pointed out.

　　Since Spreadtrum specializes in 2G and TD-SCDMA, baseband chips and RDA and is comparatively strong in RF chips, Tsinghua Unigroup is expected to integrate both companies' technological strengths to develop chip solutions competitive with Qualcomm's and MediaTek's solutions.

　　However, Spreadtrum and RDA are significantly inferior to Qualcomm and MediaTek in technological capability and in product offerings, therefore the combination is expected to be only able to compete for solutions for use in entry-level smartphones.

　　Tsinghua Unigroup has a 51% stake coming from investors related to or belonging to the China government.