AMD Stacks its Chips in China

AMD is investing so much time and money in China, the company has set up a holding company there.

The Sunnyvale, Calif., semiconductor maker registered AMD (China) as a foreign-invested venture with the

Chinese government to manage its activities in the country. The company will have its headquarters in the Zhongguancun

Science Park in Beijing.

AMD said the plan is to establish branch offices in Shanghai and Shenzhen, oversee subsidiaries such as the recently

announced AMD Technologies (China) Co., Ltd., in Suzhou, and AMD’s Hong Kong operations.

With one of the world’s hottest chip markets, an abundant skilled labor force and world-class engineering talent, Karen Guo, AMD chairman, president and CEO Hector Ruiz said China is a natural choice for AMD’s product goals.

“AMD’s future is tied to China’s future. And we believe it will be a bright future indeed,” Ruiz said in a statement.

“Success requires a strong global footprint, especially in growing population centers where tomorrow’s future products,

applications, and solutions are being developed. If AMD is to be successful in general, we must be successful in China specifically.”

Zhongguancun Science Park has become a bit of a mecca for IT companies. Built in 1988, it’s home to 8,000

enterprises armed with new technology including an innovation center and a high-tech satellite base. The park contains

clusters of more than 1,400 foreign-funded enterprises.

The Science Park also hosts R&D

departments run by Microsoft, IBM, Motorola and 20 other multinational corporations. Locally, Lenovo (known in the U.S. as

Legend), Founder and Chinese companies have also set up businesses in the Park.

In general, China remains a hotbed of IT activity. Government statistics released in January 2004 show the country’s

Internet user base at 79.5 million. The number catapults the country ahead of fellow Asia-Pacific region country Japan, which has 56 million Internet users but below top-ranked United States, which has 165.75 million Internet users, according to the Central Intelligence Agency’s (CIA) World Factbook.

According to the biannual Statistical Survey Report, China added 20.4 million new users in 2003, a 34.5 percent increase

over 2002. Officials determine an Internet user as someone who accesses the Internet one hour or more a week.

While 79.5 million would be a significant number in most countries, it’s a mere 6 percent of China’s total population of

1.28 billion. In the United States, Web surfers make up 57 percent of the total population of 290.34 million.

AMD entered the China market in 1993 and has expanded quickly. The company used China as one of its launching

pads for 64-bit computing. In March of this year, AMD China also received approval to establish a test, mark and package

(TMP) facility in Suzhou, China focusing on CPU production. It was AMD’s second investment in the Suzhou Industrial
Park, following the establishment of a Flash memory TMP facility in 1995, now known as FASL.

Currently, AMD’s business partners in China include local companies such as Founder, Thunis, Amoi, Dawning, Digital China

and BLX, as well as its usual partners like IBM, HP, and Sun.

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