ICube Technology, a two-year old semiconductor company based in China, says it has produced a new chip for Android tablets that combines the central processing unit (CPU) and a graphics processing unit (GPU), into one unified core.

The technology, dubbed the Harmony Unified Processor architecture, has been produced and is ready for packaging, the company said. It expects to ship the processors by the end of this year.

The Harmony Unified Processing Architecture consists of a Multi-Thread Virtual Pipeline parallel computing core, an independent instruction set architecture (ISA), an optimizing compiler, and the Agile Switch dynamic load balancer, the company said.

"Developing our own intellectual property from the ground up has been a key differentiation of ICube from other technology companies in China," said Simon Moy, chief technical officer of ICube, in a release. "This provides us with much greater areas for innovation, enables us to leverage the latest semiconductor trends, and lowers the cost of our system-on-a-chip (SOC) products relative to other chipmakers.

ICube is another example of an explosive CPU and GPU market in China where Chinese companies funded by the government seek to develop chip technology to provide a better value to the domestic market.

"I think the take away from the China market is there are a huge number of Chinese companies looking at designing CPU and GPU architectures," said Sergis Mushell, principal analyst for Gartner, in an interview. "There is a lot of developing going on in China right now. I hear at least one new name on a monthly basis."

ICube doesn't reveal the licensing architecture of the chips, nor does it reveal customers. It says it is the first Chinese manufacturer to produce a chip with multi-core processors based on parallel computing with advanced simultaneously-multi-threading (SMT) design technique. However, ICube's chips are based on the older 65 nm structure, which was phased out by Intel in 2008.

The ICube team is comprised of a mixture of Silicon Valley veterans and engineers from China. CTO Moy has 20 years of experience in the field, having worked at Nvidia as a principal engineer working on the hardware design of the vertex shaders and stream processors in several generations of GPUs. Prior to that, he worked at Silicon Graphics, IBM, and LSI Logic.

The worldwide tablet market is currently dominated by Apple's iPads, which hold 82% of the market share, according to research from Nielson. The rest of the market, which includes the Motorola Xoom and Samsung Galaxy, only hold 18% of the tablet market.

However, the tablet market in China is expected to be significant. In-Stat released a report forecasting that by 2014, sales of tablet computers in China could exceed 7 million and show 10-fold growth.

This market potential likely factored into Dell's announcement that will launch its 10-inch Streak 10 Pro tablet later this summer in the Chinese market first, instead of releasing it in the U.S. and Europe. The company didn't say whether weak tablet sales in the U.S. and Europe had anything to do with this decision. Rather, it says it wants to use what it learns in China to shape the mobile products it will offer in the future.

"In China in particular, we're currently number two in the Chinese PC market and we're seeing a significant increase in the number of small and medium-business users, who are adopting mobility products as part of their growth plans," wrote Amit Midha, Dell president for China and South Asia, in a blog post. "In Q1, our revenue from China grew 22%."

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