Low-cost chipsets for handsets powered by Google's Android mobile software are due out in the third quarter from MediaTek, the chipset developer said Tuesday, a move that is expected to propel greater adoption of the platform in Western mobile markets. Use of the new chipsets should also drive down the cost of handsets in China, where the Taiwan-based MediaTek holds significant market share with its system-on-a-chip (SoC).

MediaTek has supplied chips and other hardware to handset makers for years, and the development of a new, Android-based chipset could mean a slew of new smartphone designs in China.

In related news, MediaTek said it has joined Google's Open Handset Alliance, a group of more than 71 global mobile chipset and phone makers, mobile network operators, and other mobile industry companies whose goal is to accelerate innovation and bring the Android operating system to devices worldwide.

"As an OHA member, MediaTek strives to provide device makers and partners with multimedia-rich chipset solutions, efficient services, and experienced technical teams that differentiate our Android-based solutions," said Jeffrey Ju, general manager of MediaTek smartphone wireless communication business, in a statement.

Late last year, MediaTek also entered into a cross-licensing patent agreement with Qualcomm, with whom it previously had a troubled relationship. The deals will help MediaTek get official hardware drivers and performance optimizations for Android that are expected to increase use of the platform in some phones designed for the Chinese market, industry observers said.

The partnerships could also help MediaTek fight China's crackdown on so-called gray-market handsets. MediaTek works with some small makers of low-cost, imitation smartphones, but pressure from major handset makers has forced the Chinese government to investigate the gray-market vendors for issues like tax evasion. Already, shipments of gray-market cell phones made in China are expected to decline by 25% in June as compared with May's shipments, according to market research firm iSuppli. The investigation could hurt MediaTek since many of the gray-market vendors use its chipsets.

"Semiconductor supplier MediaTek, a leading fab based in Taiwan, may also find itself on the losing end of the investigations,'' iSuppli reported. "At present, the company owns more than 80% market share of baseband units for gray handsets in China, and its MT6223 chip -- the most popular platform for gray handsets -- is currently short on supply."