"We have started large-scale production of 0.13-micron-width chips in Germany and our new products come out in about three months' time," said a senior executive with AMD China, who declined to be named.

The adoption of 0.13-micron technology from the present 0.18 micron will allow AMD to cut the space of its processors from 128 square millimeters to 80 millimeters and it was believed it will reduce AMD's costs significantly.

Intel, the US chip giant and also AMD's major competitor, launched its 0.13-micron Pentium 4 2.2-gigahertz processors on January 8 in China and saved about 30 percent of chip space.

Some analysts believe that the first adoption of 0.13-micron technology will allow Intel an advantageous position in production costs against AMD, whose processors target low and medium-income users.

Statistics from the US research firm Mercury Research last week show AMD's share in the world's central processing unit (CPU) market grew from 16.7 percent to 20.2 percent.

Although there are no official statistics about AMD's share in the Chinese market, some industrial researchers predict that the figure was around one-fourth.

Analysts point out that although AMD has made considerable progresses in the Chinese market in the past year with the launch of its Athlon XP processors, which are cheap and have good performance, it will not shake Intel's monopoly in China.

"AMD lags behind Intel in marketing and it will be very difficult to win the hearts of big computer makers who rely heavily on Intel," said Zhang Hongfen, a senior analyst with CCID Consulting Co Ltd, a well-known IT research organization in China.

She also said the competition in the processor market would shift to performance rather than just prices this year.

AMD is aware of these issues and has begun to make moves in areas other than desktops, such as the laptop market.

The company is still trying to live down an embarrassing moment last year, when despite its marketing campaign, not one AMD processor-based laptop was sold in China.

According to the AMD China executive, his company acquired 39 per cent of the laptop market in the United States last year, up from 5 percent, and he believed that since most of the major brands in the Chinese market were products of international players, it would be easy for AMD to win support from these players and and extend their AMD-chip-based products to China.

"We will gain a foothold in the laptop market this year," the source said.

The company organized a Clustering Supercomputer Technology Forum last week in Beijing and tried to promote its processors for supercomputers to research organizations.

(China Daily January 28, 2002)