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DECEMBER 19, 2005
AMD's Asian Thrust It's challenging Intel's hold on China and India It's one of the world's most lopsided two-company battles. Globally, Intel Corp.'s (INTC ) chips power 85% of PCs and servers, while those of Advanced Micro Devices Inc. (AMD ) are in just 15%. But AMD is seizing the opportunity in the two biggest developing markets, India and China. Intel, meanwhile, senses the heat and is pushing back against its scrappy rival. "The future growth for Intel will be driven by emerging markets, and China and India are key," says Amar Babu, Intel's South Asia sales and marketing director. LENOVO'S LUSTER Both companies are doing their best to woo Asia's giants. Hector Ruiz, chief executive of AMD, arrived in India on Nov. 30 and said AMD would join a consortium to build India's first semiconductor plant. As he was leaving, Intel Chairman Craig R. Barrett touched down to announce a $1 billion investment for chip research in Bangalore and venture-capital investment in Indian startups. And during an October trip to China, Ruiz said AMD would share technology with Beijing, while Barrett on Dec. 6 opened a $200 million assembly and testing facility in the western Chinese city of Chengdu. AMD has been emboldened by recent gains in China. Last year, Lenovo Group Ltd. (LNVGY ), the leader in the Chinese PC market, agreed to use AMD chips in most of the desktops it sells on the mainland. That has helped the underdog chipmaker more than double its market share, to 19%, in the past year. "Winning Lenovo was a very key milestone for AMD China," says Rose Wang, AMD's director for corporate marketing in China. In India, AMD has boosted its share from nothing to 13% by establishing strong relationships with local PC makers. Now AMD is playing to Indian pride. In June, Technology Minister Dayanidhi Maran tried to convince Intel to open a chip-testing facility in India. But Barrett was noncommittal, infuriating Maran. AMD then stepped in with a pledge to supply technology for a chip factory. In exchange, Maran promised that ministries and organizations such as the country's railways and schools -- which together account for more than a quarter of all PC purchases -- must consider both AMD- and Intel-powered computers. In the past, government contracts had specified Intel processors as a way of keeping fly-by-night manufacturers out of state institutions. To be sure, AMD is far from winning the microprocessor wars in either country. Intel has a commanding market presence in both, with far better distribution, more sales execs, and thousands of researchers. And next year, Intel will unveil a low-cost PC for use in the rural multimedia kiosks springing up across India. If successful, the product could find its way to China as well. Nonetheless, if AMD can keep making strides in Asia's emerging giants, the global microprocessor competition may become a bit less lopsided.  By Manjeet Kripalani and Bruce Einhorn Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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