Intel strengthens network in China

BEIJING: Semiconductor giant Intel Corp and Legend Group Ltd. China's biggest computer maker, said that they would open a centre to develop home network technology and security applications.

The move was seen as largely symbolic, cementing a relationship between the world's largest chipmaker and Legend, which controls about a quarter of the Chinese market and whose PCs now use Intel chips exclusively despite recent advances by Intel's chief rival Advanced Micro Devices Inc.

The centre, to be based out of Legend's Beijing facilities, would have 30 to 40 engineers, Intel China President Wee Theng Tan said.

He declined to give the value of Intel's investment in the project, saying it would depend on the scope of future research.

Tan told Reuters research would focus on technology linking televisions, computers and other appliances into a digital home network and making computers more secure.

"It's the next big thing," he said in a telephone interview.

"Many of our efforts are proactive, and from a research-and-development perspective, we have focus programs that look at products three to five years ahead of time."

Legend, which recently adopted Lenovo as the English-language brand name for its PCs, has been pushing to diversify its core computer business into creating home networks that link TVs, printers, mobile phones, refrigerators and DVD players.

It has joined firms such as Microsoft Corp, Sony Corp, Hewlett-Packard Co. and Samsung Electronics Co. Ltd in an alliance to create open standards to make it easier to send music from computers to TVs.

Tan said Intel had an interest in meeting the needs of Legend, one of its biggest customers in China.

About 40 percent of Intel's sales come from the Asia-Pacific region, making it the largest geographic segment for the Santa Clara, California-based company. China is the firm's second-largest market after the United States.

The chipmaker said on Wednesday it planned to build a $375 million assembly and test plant in western China that is due to begin operations in 2005 or 2006.

Construction on the plant in Chengdu, in Sichuan province, will begin in the second half of 2004 and is expected to be complete in 2005.

© Reuters