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Print Edition> Business
UPDATED: April 25, 2007 NO.18 MAY 3 2008
Chinese Chip Challenge
China's Godson CPU strives for a greater share of the PC market now dominated by Intel and AMD

On April 15, a five-month long trial conducted among 1,000 users of Fulong mini-PCs containing the independently developed Godson processor resulted in good user feedback all around. Upon receiving the positive news, producer Jiangsu Lemote Technology Corp. Ltd. announced it would begin mass-producing the mini-PC.

Compared with other domestic PC brands such as Lenovo and Founder, the Fulong mini-PC uses only Chinese independent technologies and brands, providing an alternative to computers installed with U.S.-made Intel or AMD chips. The future of the Godson chip remains unpredictable, though many in China would like to see it topple Silicon Valley and threaten Intel’s and AMD’s dominance of the PC market.

Finding the chip niche

The Institute of Computing Technology (ICT) under the Chinese Academy of Sciences (CAS) began promoting the application of the Godson chip after developing the 64-bit Godson 2E processor in 2005. Besides Jiangsu Lemote Technology’s Fulong mini-PC, the BLX ID Design Co. Ltd. has developed a PDA mini-server and the Beijing Skyvein Network Computer Co. Ltd. has created a network computer.

The mass-produced box-shaped Fulong mini-PC, also known as the Lemote Box, will be priced at around 1,000 yuan, according to Jiangsu Lemote Technology. Thousands of orders were received for the box within a week after the developer started taking purchase orders at 1,599 yuan last November.

Compared with traditional computers, Skyvein’s network computer can provide similar functions at lower costs with a price close to that of a Lemote Box.

Unsatisfied with the domestic market, producers of the Godson chip are looking to tap into the international market.

On March 28, ICT and ST Microelectronics agreed to jointly develop and commercialize processors based on the Godson 2E core. Under the licensing agreement, ICT granted ST Microelectronics the right to manufacture and sell the processor worldwide for five years, during which time ST Microelectronics will pay ICT licensing and royalty fees and sell the products using the Godson brand. Under the agreement, ST Microelectronics will pay ICT $30 million for licensing Godson 2E and pay a $2 royalty fee for each Godson chip it sells.

A PC for all

“We aim to develop a computer that the majority of Chinese can afford and one that meets the needs of ordinary users,” said Zhang Fuxin, General Manager of Jiangsu Lemote Technology at a meeting in Beijing on March 28.

There are currently around 50 million PCs in China and about 100 million people have access to the Internet. By 2020, there will be 200-300 million Internet users in China, said Zhang. The goal of Jiangsu Lemote Technology is to develop a PC that 500-800 million Chinese can afford, allowing them to benefit from the emerging technology, he said.

The most advanced products on China’s PC market today are dual-core PCs, which few Chinese families can afford. Computer users in many small and medium-sized cities also lack the computer savvy of those in large cities. Due to these factors, it is thought that personal computers priced at around 1,000 yuan enjoy the largest market potential nationwide.

The development of a chip of China’s own is meant, on the one hand, to allow special users such as the government and the army the ability to use computers that protect national information security, and on the other, to dominate the medium- and low-end PC market and produce energy-efficient computers at low cost.

ICT Director Li Guojie said that products based on the Godson chip should target farmers and primary and middle school students, help to promote information technology penetration in rural areas and increase access to the Internet in schools.

All these goals demand products installed with the Godson chip be economical and applicable. “We should make breakthroughs in low-price desktop and laptop computers while focusing on the set-top box, auto electronic appliances, control engineering and other fields of embedded chips,” said Li.

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