US microprocessor manufacturer AMD yesterday opened its Shanghai research and development (R&D) center, the firm's largest overseas R&D investment.

 

The opening of the R&D center, AMD's second on the Chinese mainland, which involves a total investment of US$16 million, points to the growing role China is playing in the firm's efforts to catch up with its arch-rival Intel.

 

Around 100 engineers will work at the center, with the number expected to grow to 400 within two years.

 

AMD currently has about 70 development engineers working in Beijing and 200 in Taiwan.

 

"The establishment of the Shanghai R&D center is a stage in our 'walking' period in China," said Dirk Meyer, president and chief operating officer of AMD.

 

Comparing his company's development to the growth of an infant, Meyer said AMD, which began to invest heavily in China in 2002, had now just passed the "crawling" stage.

 

In the "walking" stage, the US firm wants China to become a more important part of its global operations, and will base some of its business units' global headquarters in China, which will develop products for global markets.

 

The Shanghai center will focus on the development of AMD's microprocessors used in notebook computers, as well as validating and testing solutions for computer makers in the domestic and international markets.

 

AMD, which has been trying to challenge industry behemoth Intel in recent years, has made significant progress in the global and Chinese markets.

 

China is the world's second-largest computer market and manufactures 80 percent of the world's computers, with Lenovo Group, China's biggest computer manufacturer, being a major user of AMD products.

 

One year ago, Intel also located the global headquarters of its channel platforms group, one of its major business groups, in Shanghai. Its function is also to work with computer manufacturers in computer system design and solution testing.

 

AMD has so far gained some ground as it strives to catch up with Intel in terms of consumer desktop computers and servers. But it still needs to make breakthroughs in the notebook and enterprise desktop computer segments.

 

"In every segment, we must maintain and increase our relations with customers, provide innovative technologies to them, and make market competition more open," said Meyer.

 

In a rare attack, Meyer said the industry was "sick" with Intel making huge profits, leaving many computer makers either in the red or with just a single-digital operating profit margin.

 

"Our strength is based on the knowledge that our customers want a choice," said Meyer.

 

AMD has waged legal battles with Intel in the United States, South Korea and other countries, where it has accused the firm of monopoly practices.

 

Meyer said this is a long and sometimes painful process, due to difficulties in collecting evidence, expecting the earliest court hearing to take place sometime next year.

 

He added that as a smaller player in the microprocessor business, AMD has been engaged in price wars, as price is a weapon that his company has to use to challenge Intel.

 

But he said that AMD now has more weapons, so competition is being extended to many more areas.

 

(China Daily August 23, 2006)