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Sow Before You Reap - CCID Deciphers Latest Intel Move in China

Sow Before You Reap - CCID Deciphers Latest Intel Move in China

BEIJING, April 9 /Xinhua-PRNewswire/ -- CCID Consulting, China's leading research, consulting and IT outsourcing service provider, the first Chinese consulting firm listed in Hong Kong, analyzes Intel's latest move in building a wafer plant in Dalian, China.

On March 26, Intel announced that it will invest $2.5 billion to build a wafer plant in Dalian, China. The new plant will adopt the world's most advanced 300mm wafer precaution technology. The factory will not only be Intel's biggest investment in China but also the first Intel wafer plant project in East Asia.

To decipher Intel's decision in setting up a wafer plant in China, CCID looks into the growth environment and trend of the global computer industry.

In the fiercely contested computer industry, multinational companies represented by Intel actively participate in global competitions and define the industry's developments and trends. As economic globalization gathers pace, multinational companies have notably sped up their overseas expansion and global resources integration. Integrating the most competitive production resources and investing and setting up factories in target markets to get closer to end-users are of great strategic significance for lowering cost and improving product competitiveness. Thanks to its huge market demand, low-cost production elements (labor, land, talent resources), solid industry foundation and production capacity, China has won a favorable position in industry transfer. China's fast-growing economy and information industry have also made multinational companies to reassess the value of the Chinese market. For them, China is no longer just a concept of sales market. More and more multinational companies are now shifting their R&D, manufacturing and other infrastructure industry chains to China. Intel's decision to build its 8th wafer plant in China precisely embodies the above development trend of the computer industry. It is the result of Intel's move to adapt to the trend and speed up global competitions and resources integration.

CCID Consulting considers that by setting up a factory in China, Intel will seize the first opportunity to increase production capacity and cultivate the market. The move will also produce a profound impact on its future competitions with AMD.

In the next few years, the global PC market will continue to maintain a growth momentum. By building a wafer plant in China, Intel can directly expand its production capacity and supply products to main board and PC makers in China. It will eliminate the possibility that its competitors will get market chances due to its own supply problems. As the demand for PCs continued to grow, Intel's chipsets were in short supply in late 2005 and mid- 2006. The direct result of this was the hot sales of AMD's processors and chipsets, forcing Intel to lower its product prices.

Secondly, to win competitions with AMD in the future, Intel can no longer count on traditional strategies such as product and price competitions. The resources inputs will play a more decisive role. The so-called resources inputs include not only support for vendors but also the support provided by the Chinese government for the industry and technology. With its factory in Dalian, Intel's total investment in China will reach $4 billion. This shows Intel's determination and confidence in investing in the Chinese market. It is good for Intel to get support from the concerned government department, establish a good image in the Chinese market and get more opportunities in China. This is precisely what the old proverb says: to sow before you reap. Surely, Intel knows about it very well.

CCID Consulting thinks that despite its limited role in pushing forward the development of China's semiconductor industry, Intel's move is nevertheless of certain significance. The wafer plant, which Intel is to build, will no doubt be integrated into China's semiconductor industry. It will therefore raise the product output and upgrade the product structure in China. What is more significant is that Intel's factory in China will make certain contributions to IC talent training in China and help the country to develop its own IC industry.

About CCID Consulting

CCID Consulting Co., Ltd. (also known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is a direct affiliate of the China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.

Based on four major competitive areas of the powerful data channels, industrial resources, intense knowledge and deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Our customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks.

CCID Consulting is committed to becoming the No. 1 brand for strategy consulting, the No. 1 consultant for enterprise management and the No. 1 expert in market research. For more information, please visit our website at http://www.ccidconsulting.com/default_e.asp .

For more information, please contact: Cynthia Liu Coordinating Manager CCID Consulting Co., Ltd Tel: +86-10-88559080 Email: [email protected]

CCID Consulting Co., Ltd

CONTACT: Cynthia Liu of CCID Consulting Co., Ltd, +86-10-88559080, or
[email protected]

Web site: http://www.ccidconsulting.com/default_e.asp

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