Intel, the world's largest computer chip manufacturer, further entrenched its No. 1 status in China against main rival Advanced Micro Devices (AMD) after signing cooperation agreement with local computer giant.

Intel last week signed a memorandum of understanding with the Beijing University Founder Group, China's second biggest computer producer. The agreement offered technological support and training for the two company's cooperation on digital home service.

But only four months ago, Founder formed a strategic alliance with the US-based AMD. Under the agreement, it would make and sell computers based on AMD's 64-bit microprocessors.

Lenovo Group, China's largest computer producer, also signed a pact with AMD in June to use AMD's Athlon 64 and Athlon XP microprocessors in some of its desktop personal computers.

But the computer giant has, market analysts said, so far devoted a small amount of resources to advertising the line of PCs based on AMD's chips. The chips are planned to make a hit during the summer time.

"We care more about application. If one technology fails to bring favorable experience for consumers, it is immature," said Qi Dongfeng, Founder Technology's executive president when asked to comment on AMD's 64-bit microprocessors.

Intel's capital strength also accounts for the change of attitudes of the two computer moguls, said a senior official with a computer manufacturer, who refused to be named.

Intel has a special fund to help business market products, he said, but AMD cannot offer the same financial support.

Despite this, AMD is following Intel's lead. The company is striving to change the situation with plans to promote its 64-bit calculation technology on the PC and server markets.

Over 1,000 major OEM manufacturers and software and hardware developers in China are able to support AMD's 64-bit applications, said Chen Jinsong, AMD China's spokesman, last month, who added that Microsoft Corp. is developing Windows XP 64-Bit Edition optimized for the chip.

With the rapid growth of China's online gaming industry, AMD is confident about expanding market share to 50 percent within three years as it believes the new chip would usher in the next wave of innovation for PCs, including "cinematic" graphics, said Ji Chaohui, product manager of the AMD China.

(CCTV.com July 26, 2004)