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Intel to Streamline Amid Challenges
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Intel is likely to make China an individual branch and have it directly report to global headquarters as early as January, as the company is trying to shorten the decision-making process and fend off aggressive attacks from rival AMD.

Intel's move comes two years after AMD established a similar operation, which had placed AMD in a better position in the China market compared to Intel.

A source with Intel China, who declined to be named, said the decision has yet to be made, but suggested the move may be soon.

The 21st Century Business Herald newspaper said yesterday the announcement will be made in mid-January.

"This just reinforces our commitment to the China market, considering its importance as the second-largest computer market in the world," said the Intel source.

According to Chinese market research firm CCID Consulting Co Ltd, Chinese customers will buy 22 million computers this year, double-digit growth compared to 2005.

The new plan is aimed at making China Intel's fifth regional market together with the Americas, Asia-Pacific, Japan, Europe, the Middle East and Africa. The China operation is expected to have more authority in regional strategies, including marketing budgets and formats, as well as relations with computer makers and distributors.

Currently, Intel China reports to the Greater China operation, which then reports to the Asia-Pacific headquarters in Hong Kong and Singapore. The long process has been one of the major reasons the firm has lost companies such as Lenovo and Founder Technology to AMD.

Cao Ran, an analyst with CCID Consulting, said the attacks from AMD require the chip giant to change its structure in China to have a flexible reaction in the market.

Three years ago, AMD had just a fraction of a market share, but now its share is about 25 percent.

"AMD has given a lot of pressures to Intel, since Lenovo Group endorsed AMD chips in 2004," said Cao.

She said China is a top priority for both Intel and AMD considering the size of the market, but AMD has been more aggressive in making the necessary changes for the market.

In 2002, AMD named Karen Guo corporate vice-president and president of AMD China, directly reporting to the company CEO to highlight its focus on the China market. Last week, it promoted Guo to corporate senior vice-president to reward her for the achievements and give her more authority.

(China Daily December 1, 2006)

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