Gartner Research

Recognize the AMD x86 Licensing Agreement in China as Representative of a Larger Trend

Published: 10 October 2016

ID: G00308424

Analyst(s): Uko Tian , Evan Zeng , Roger Sheng , Jeffrey Hewitt , Ganesh Ramamoorthy

Summary

Business unit leaders in infrastructure providers must create licensing agreements or partnerships with Chinese providers or they will not realize an optimal revenue contribution from what promises to be the highest-growth country in the coming five years.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • China is willing to invest and participate in parts of the technology value chain to advance its own domestic "local supply" capabilities and reduce what has been a massive trade deficit in technology (more than $100 billion annually), which can reduce business for infrastructure providers outside of China that sell into the country
  • China could use the agreement with AMD to build more microarchitecture development capabilities over time in alignment with its longer-term efforts through 2025 to be more self-sufficient in the technology area, which will benefit both Chinese providers and AMD
  • Any processors produced from the AMD agreement through 2017 will be limited to the 28 nm size in China due to the fabrication equipment that is currently available in the country, so this will not present competition in the short term to the Intel-based server providers using the latest wafer technologies

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