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SK Telecom, a provider of wireless telecom services in Korea, announced SK China’s joint venture, SKMtek, with MtekVision, a fabless semiconductor company in Korea, to offer system-on-chip for mobile devices and tablet PCs, and later expand into solutions and non-telecom semiconductors in China.

Both SK China and MtekVision will invest to set up SKMtek by transferring semiconductor technology and business infrastructure. The new joint venture will have an initial capital of $16.78 million. The company will increase its capital in line with business expansion.

SK China and MtekVision will hold 60 percent and 40 percent equity stakes in the joint venture, respectively. The new venture will be headquartered in Shenzhen's High-Tech Industrial Park.

The joint venture will offer cost-effective products by combining South Korea's semiconductor design technology with China's strong semiconductor manufacturing base. The joint venture plans to achieve its sales target of $353.36 million in 2016.

According to company officials, the new joint venture will be a new milestone for SK China. SK China is entering the growing system-on-chip (SoC) market sector in China for the first time by leveraging Korea's semiconductor design expertise and China's semiconductor manufacturing experience.

SKMtek is expected to bring mutual benefits to SK China and MtekVision as SK China will be able to expand its existing ICT business to include core solutions for mobile devices like SoC and related software while MtekVision maximizes its semiconductor sales in China by making full use of SK China's well-established infrastructure and network.

With this partnership, SKMtek will be able to make a successful entry into the Chinese market, where the manufacturing industry is showing growth. The joint venture is also planning to expand its business to other global markets.

Recently, SK Telecom (News - Alert) announced that it will triple its broadband capacity and offer five times faster data download and seven times faster upload speeds from July 2011.