HTC is believed to be developing its own processors for future, low-end smartphones, according to China Times, and already has a deal in place with ST-Ericsson.

The Chinese language news website claims that the new homemade chip will start shipping in volume next year, and will run the Taiwanese manufacturer's low-end smartphones.

A memorandum of cooperation with ST-Ericsson - which is a joint venture between Ericsson and STMicroelectronics - has reportedly been signed and could lead to HTC moving away from its current chip supplier Qualcomm.

Industry insiders believe that HTC is unhappy with Qualcomm after the chip manufacturer announced supply constraints for its flagship 28nm Snapdragon S4 processor after it misjudged demand.

For its high-end models, HTC has looked at Nvidia as an alternative, using its Tegra 3 quad-core processor in the flagship One X smartphone - which we reviewed - as Qualcomm was not ready with its own quad-core offering.

HTC began life making budget Android smartphones which it sold to third parties for re-labelling but since it began producing its own-branded phones it's stock has risen quickly and it is now one of the world's most recognised smartphone manufacturers. It has recently been focused mainly on high-end Android smartphones challenging the likes of Samsung's Galaxy S2 - due to be replaced on 3 May - and the iPhone, but developing processors in-house would save on costs, resulting in lower retail prices and more devices in the low- to mid-range market.