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AMD looks to China for desktop PC operations

AMD looks to China for desktop PC operations

AMD will be closer to key customers like Lenovo and get products to market quicker, analysts say

Advanced Micro Devices has moved its desktop chip business operations from the U.S. to the growing market of China, adding to its research lab and testing plant there.

The desktop market in China is growing at a fast pace and its shipments of desktops and laptops are equal in ratio, said Michael Silverman, a spokesman for AMD, in an email. "The desktop market in China remains strong," Silverman said.

The move of AMD's desktop operations was first reported by technology news publication Digitimes, but the chip maker confirmed the news.

The company is also developing tailored products for users in China, Silverman said.

AMD's move of desktop operations to China brings them closer to key customers such as Lenovo, said Dean McCarron, principal analyst at Mercury Research.

"Not that they don't have their sales in the U.S.," but a significant number of those PCs are made in China and then shipped internationally, McCarron said.

AMD is the world's second-largest x86 processor maker behind Intel. Many PC makers like HP and Dell get products made in China.

Being in China also solves some desktop supply chain issues because it moves AMD closer to motherboard suppliers like Asustek and MSI, which are based in Taiwan, but get parts made in China. Chips will be shipped to customers faster and at a lower cost, which would reduce the time it takes for PCs to come to market, McCarron said.

AMD already has a plant in Suzhou, which Silverman said "represents half of our global back-end testing capacity." AMD's largest research and development center outside the U.S. is in Shanghai.

Some recent products released by the company have been targeted at developing countries. AMD recently starting shipping Sempron and Athlon desktop chips for the Asia-Pacific and Latin America markets, and those chips go into systems priced between $60 and $399. AMD is targeting the chips at users that typically build systems at home and shop for processors, memory and storage. The chips -- built on the Jaguar microarchitecture -- go into AMD's new AM1 socket, which will be on motherboards and is designed for users to easily upgrade processors.

China is also big in gaming PCs, and remains a key market for AMD's desktop chips, said Nathan Brookwood, principal analyst at Insight 64. "White box integrators play a big role in China," he said.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

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