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Processor Watch

China’s Microprocessor Dilemma

June 26, 2006

Issue #062606

Author: Tom R. Halfhill - Senior Editor

Masterminding a centralized economy for a nation of 1.3 billion people is an awesome task. Former leaders of the Soviet Union tried to manage a nation one-fourth as large and ultimately failed. That’s almost certainly the reason China’s communist leaders are increasingly outsourcing the job to the Chinese people. Private enterprise and market forces, though still confined, are transforming China in ways that centralized management could not.

However, as Microprocessor Report learned during a recent visit to China, the country’s leaders still face difficult decisions. One is the seemingly minor question of which microprocessor architecture to support in a coming wave of low-cost personal computers designed for the Chinese domestic market. The most obvious answer—the x86 architecture, already the world standard and the only platform running Microsoft Windows—isn’t necessarily the best answer for China.

MPR learned that the question of which CPU architecture to promote could significantly affect the direction of China’s future economic growth. It’s related to seemingly unrelated things, such as China’s ambition for technology independence, a widening gap between rich and poor that threatens social stability, and mounting problems with urban sprawl and environmental pollution. Indeed, so much is riding on this question that the Chinese government doesn’t want to delegate the decision to the unruly chaos of the free market, as has happened elsewhere in the world.

Are we overstating China’s dilemma? Read our analysis and judge for yourself.

Microprocessor Report readers can access the full story (5 pages, 5 graphics) here: www.mdronline.com/mpr/h/2006/0626/202602.html. To find out more about Microprocessor Report, please visit: www.mdronline.com.