Intel's processor sales in China surge 39%
By Jack Robertson
EBN
(10/25/02 01:29 p.m. EST)
Beijing -- Intel Corp.'s PC processor sales in China jumped 39% during the third quarter compared to the same period last year, according to the firm's top China executive.
Wee Theng Tan, president of Intel China Ltd., said the company's strong showing compares with market analysts' estimates of a 20% year-over-year growth rate in the country's overall PC market.
Tan said all market segments -- distributor channel, Chinese OEMs and multinational OEMs -- are evenly divided in Intel's processor shipments. "We see no slowdown in the China market," he added.
One factor spurring China's PC bonanza is the surge of sales in outlying regions of the country. "PC sales in these regions, where there has been a low penetration up to now, are growing even faster than in more mature markets of the major cities," according to Tan.
The Intel official said Chinese consumers are buying high performance processors as soon as they come on the market, following the same sales pattern as the rest of the world. He said the new 2.6-GHz and 2.8-GHz Pentium 4 chips are selling in China at the same rate as in the rest of the world.
Intel's new 64-bit Itanium 2 processor has also been selected by several major Chinese server firms, including Legend Computers and Langchao, he said. "Itanium will find its way into the Chinese marketplace."
The ability of Intel to ship Itanium 2 chips at many performance levels to China is due to a recent relaxation of U.S. export control limits on computers. "We are not meeting any (export control) obstacles today on all our commercially viable processors," Tam asserted.
Intel's own chip production in China at its assembly and test plant in Shanghai is expanding capacity in a $300 million project, on top of the $200 million original investment in the facility. The chip plant assembles and tests more than half of all Intel-produced chipsets and half of all flash memory devices, he said. Early next year the Shanghai facility will start assembling mainstream Pentium 4 processors.
Unlike many foreign electronic firms, Intel sees no need to form manufacturing joint ventures with Chinese partners. "We have been operating well in the current environment on our own," Tan pointed out.
Intel Capital, however, has invested in more than 20 Chinese companies, mainly software developers, systems integrators, and wireless product firms. He expected some Chinese firms will be selected as part of Intel's announced $150 million investment fund for companies in the wireless market.
