Most phone manufacturers, or manufacturers of any consumer electronics, tend to farm out some of the more critical components of their devices. An excellent example is processors: currently HTC gets system-on-a-chip boards from Samsung and NVIDIA. But that may change soon, for some phones at least: ChinaTimes reports that HTC has partnered with fabless semiconductor company ST-Ericsson to create new chips for their low-end phones.
ST-Ericsson (not to be confused with Sony Ericsson, now absorbed into Sony itself) is a chip supplier that doesn't get much media attention, because their component design handle the more mundane tasks in smartphones, like mobile data and GPS radios. The company has extensive experience in designing for Android-specific devices, including HTC's. Creating a low-cost, low-power chip for more inexpensive phone makes a lot of sense for HTC, which provides a wide portfolio of entry-level Android phones. Creating or outsourcing their own unique chips may be cheaper than buying them from Qualcomm after initial expenses.
In any case, it'll probably be at least 18 months before we see HTC-branded processors in HTC phones - creating new designs and integrating them into hardware won't happen overnight. It can be hoped that this partnership will bring some better performance to the low-end, but that's not really the aim here. We'll keep an eye on the proceedings to see when the first hardware becomes available.