According to a memorandum of understanding between the Ministry of Science and Technology and the US central processing unit (CPU) maker, AMD will transfer its microprocessor core technology, based on the mainstream x86 microprocessor design architecture, to the Peking University Microprocessor Research and Development Center.

"We believe that AMD's long-term success depends on our ability to help China grow its information technology business, and we are demonstrating this belief by sharing this important technology with our valued partners in China," said Hector Ruiz, AMD chairman, president and chief executive.

It is the first time that main-stream microprocessor design technology has been transferred to a Chinese organization from global leading players in the CPU industry.

The second largest CPU firm in the world, AMD said the transfer is in agreement with the technology export control regulations of the US Government.

The AMD Geode microprocessor technology, with specific features such as low power consumption, is mainly used for industrial applications like thin-client computers, mobile communication devices, digital television sets and handheld devices.

Huang Yong, president of the domestic research house CCID Consulting, believed the transfer will help AMD spread its brand image and further improve its relations with the Chinese Government.

China has been trying to boost its technological capabilities and integrated circuit design, especially on microprocessors as a core goal.

However, most Chinese organizations are troubled by patent issues, since they need to use patents of international leaders like Intel, AMD, ARM or MIPS.

Huang said that with the AMD technology, the microprocessor center at Peking University will be able to start on a higher level with mature technologies, free from intellectual property right disputes.

The Chinese Government's appreciation of the transfer may score more points for AMD, which competes intensely with Intel.

The world's largest microprocessor maker has invested heavily into the Chinese market. It is known for its role in blocking a Chinese wireless network security proposal from becoming of international standard since 2003.

Jennifer Liu, a spokeswoman of Intel China, said yesterday: "It is more important to see if one commitment is for the long term and if it will support the establishment of a local eco-system."

CCID Consulting's Huang believed the cooperation with a Chinese partner also allows AMD to narrow its gap with Intel in consumer digital devices like mobile phones and digital TV sets, which are believed to have huge potential in China with the coming popularity of digital TV and the third generation mobile communication systems.

"It is unrealistic for AMD to quickly close the gap with Intel, but it is good to get ready for the boom of digital electronic devices, especially with some local content in it," he said.

AMD began hedging bets on the Chinese market in 2003 and Ruiz, on his second visit to China this year, said his company would not be successful globally unless it succeeds in China.

Beijing became the headquarters in AMD's operations in the Chinese mainland, Hong Kong, and Taiwan.

The company yesterday moved its Chinese regional headquarters from downtown Beijing to an office building in Zhongguancun, the Chinese Silicon Valley. It rented three floors from the Raycom center, developed by a sister company of the biggest Chinese computer maker Lenovo Group.

It also invested US$100 million into the first assembly and testing plant in Suzhou, which is a two-hour drive from Shanghai.

(China Daily October 25, 2005)