AMD licenses its x86 server chip technology to Chinese company

Advanced Micro Devices, well known as AMD to the world of computing has announced a plan to license the design of its top of the line server processors to newly formed Chinese Company called THATIC- Tianjin Haiguang Advanced Technology Investment Co. Ltd.

THATIC was formed by a consortium of public and private Chinese companies.

AMD is providing all the technology needed for THATIC to make a server chip, including the CPUs, interconnects and controllers. THATIC will be able to make variants of the x86 chips for different types of servers.

Most PCs and servers are based on x86 chips, but licensing the chip technology to other companies is rare, even if that company is a joint venture, said Jim McGregor, principal analyst at Tirias Research.

AMD is a small company when compared to Intel, but its latest partnership with THATIC could make the company bring down the market share of Intel in Asia. If at all the x86 and other servers from China hit the market, AMD can flourish in Asia and offer products at low cost, which will negatively affect the market of Intel brand.

This can build up competition among Intel and AMD in the next two years.

Also as per the latest developments, Intel has planned to slice down its work force to focus on Cloud and IoT market in coming years. Cutting down workforce will surely affect the production of processor chips and this can help AMD and THATIC gain more customer base in the meantime.

All these years, Intel enjoyed a global business presence, while AMD had just a few regions as its market share. But now, AMD’s latest move can not only help it in expanding its market share, but may also make the Sunnyvale Company license its PC chip designs in future.

The licensing deal and joint venture also give AMD a direct entry into the booming China market. Companies like Baidu, Tencent and Alibaba are building mega data centers, much like Google and Facebook in the U.S., and are committing a lot of computing resources in areas like machine learning. AMD’s latest tie-up with Chinese THATIC can open new business doors for the silicon chip maker.

The joint venture will also give the Chinese government access to x86 designs, which it has coveted for a long time, McGregor said. China wants to foster the development of homegrown chips, and local companies already have access to architectures like Power, ARM and MIPS.

But there’s still a lot of work to be done by AMD to build a relationship with the Chinese government.

Intel is already in the good books of China as it has been politically nice with the Asian country and has already invested heavily in China.

What do you think about the latest partnership? Can AMD prove as a competitor for Intel in ‘Internet of Things’?

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