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Intel’s Upcoming Rival—VIA Technologies Part 6

Monday, December 17, 2001 In order to compete with Intel, VIA knows that it has to start from the China market. This market consists of 1.3 billion population that still have much room for new PC. VIA also know that PC alone is not enough to penatrate the market. Internet Appliance must be indroduced.

VIA’s Vision in China

Cluster Village- Beijing

Along the way on Loop-4 from the Capital Airport to the Cluster Village (heart of Chinese IT and communications) is a large billboard that says “VIA’s Love - China’s IC”.

VIA’s China R&D center started operation a year ago. Its original goal was to recruit 250 R&D staff within 2 years. These people would go through the training and become the foundation members. Ultimately would grow to a team of 1,200 people to compete against Intel’s R&D center in Beijing.

Now after a year in operation, VIA’s Beijing office only have 50-60 people. Mr. Tsui, China Operation Manager pointed out: “Since most of the China Headquarters of western corporations are located in Beijing. They are all competing for good people, it would be relatively difficult for Taiwanese companies to recruit. Especially that there is a popular slogan among students of Beijing University saying ‘Come ye come – to Beijing University! Go ye go – off to America!’ Supply is definitely less than demand.” Fortunately, after a year of “path seeking”, Mr.Tsui is already familiar with the local human resource market. He now knows what kind of student each professor has and what subject they are doing in their research. He can then have an early start in the colleges to gain a better win.

Beijing and Taipei project a scene of technological competition. VIA’s Tsui believed that Taiwan should be 3-5 years ahead because Taiwan has more senior researchers and in-depth product experience. They also have speedy communications and fast international information channels. These were accumulated over many years.

Moreover, researchers have to have a maverick spirit and innovation in many aspects. That requires freedom in thinking. Unfortunately, China is still a single party country that controls from news to movie theaters and from politics to religion. Everything is still under close scrutiny of the government. Political atmosphere is especially felt in Beijing. Under these circumstances, it would be difficult to encourage creativity.

Low Cost PC, VIA’s Commission

Beijing is attractive to Taiwanese companies. Besides manpower, it is also a huge market. VIA is trying to use the low cost entry-point computer to break into this market. That would allow VIA to unload its C3 microprocessors in this special market.

VIA’s Asian Market Director, Mr. Cheng breaks it down: “In the past few years, China emphasis “grow the country with technology”. New policies favoring technology development are being pushed vigorously. PC requirements for the grade schools and high schools would be 2-3 million units annually. Unfortunately, this is hindered by the insufficient funding. PRICES, is therefore, a very important factor. Since the most expensive component in the PC is the microprocessor. VIA’s C3 processor with its low price and functional stability would fill the requirements and have a good future.

“VIA’s Love – China’s IC” tapping on VIA’s Chinese relationship

Besides prices, VIA does not forget national patriotism. VIA’s slogan “China’s IC” has attracted much awareness in Beijing. Besides, VIA is indeed, the one and only Chinese company that can produce a CPU. It certainly deserves the title “China’s IC”.

“In the global information technology industry, China is already among the top three producers of hardware and software. Question is why does the CPU still being controlled in foreign manufacturers’ hands?” Basing on this question, plus the popular push of “made in China”, we wondered if these are the proper ingredients for success. However, the battle between Intel and VIA, (the “Chinese Intel), is getting to be red hot. It would be an interesting game to watch in the coming years.

In order to fuel the speedy growth, VIA has to utilize its resources wisely. In the last two years, VIA has purchased two CPU companies in the United States. Upon the formation of joint venture with graphics IC company S3, it also has setup a US R&D facility for this project. In Taiwan, it concentrates on niche products and system logic IC. As in Beijing, it concentrates on new communications products and graphics IC. The US, Taiwan, and China offices would work on their own area of products and compliment each other instead of threatening each other.

To be the “Asian Intel” or to be the “Standard Setter”

Once it has established the bridge front on the chipset market, Wen Chi Chen wants to move towards Intel’s core market- microprocessor. Two years ago, VIA moved to acquire Cyrix from National Semiconductors. Later, it also acquired the microprocessor division of IDT. These moves had combined the 3rd and 4th place CPU companies to solidify its CPU market entry.

Back in 1999, Wen Chi Chen boasted that VIA would occupy 50% of the global chipset market within 2 years. There would only be 2 to 3 chipset companies left in the future. At time, the media and industry leaders were skeptical. In the second half of 2000, his prediction was fulfilled.

During 2000, Wen Chi Chen declared that he wanted to have 10% of the microprocessor market share and become the “Asian Intel” over rival AMD. This time the industrial colleagues treated it seriously. They no long think that it is an unreachable goal. Many industry leaders wanted to find out how its directors can accomplish this goal.

CEO, Wen Chi Chen said, “The future of PC is no longer computations but connections.”

After winning the last battle on chipset from Intel’s dominance, now VIA has set the goal to seriously compete on CPU. It bought Cyrix and the CPU division of IDT two years ago. Last year, it introduced the first CPU code named Joshua. At the Germany Cebit Computer Show this year, Mr. Wen Chi Chan surprisingly showed up for a press conference. He handed in the 2nd report card, VIA C3 (code name Samuel II).

At this press conference for Taiwanese manufacturers, Mr. Chen enthusiastically talked about the naming of this new microprocessor and its functions. This event had outlined the future direction of VIA.

Click Here for Part-7

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By: Johnson Wang
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