Intel R&D in PRC “Strategic Implications for the future” May 28, 2005 Intel Corporation ® Intel China Research Center Intel in China 1985, Established Rep Office Jan. 1994, Established IADL in Shanghai Harbin Nov. 1996, A/T Facility ‘ground breaking’ in Pudong Shenyang Beijing May 1998, Announced Intel China Research Center in Beijing Jinan Jan 2001, Established IXA Development Center in Beijing 2002, Established APAC ADC in Shenzhen 2003 Intel A/T Facility in Chengdu Now > 4,000 Employees and Sales Offices in 14 cities Intel China Research Center Intel confidential Xi’an Nanjing Chengdu Chongqing Wuhan Shanghai Chongqing Fuzhou Guangzhou Shenzhen Hong Kong SAR Factory Lab Sales Office Intel Solution Center APAC ADC ® Technology R&D in China Intel Capital Investments Academia R&D Engagements Gov’t Standards & Regulatory Industry R&D Engagements Research and Technology Development Mission: Establish world-class technology research & development and build ecosystem support for key technology initiatives to ensure Intel’s technology leadership position in PRC ® Intel China Research Center Intel confidential Intel R&D Phased Development Model Competency Center (Level 2) Core competencies under development Core competencies clearly established Projects defined and led by US Labs Projects in core technology areas aligned with US Labs and locally led Developing local strategy and technology focus Labs agenda influenced by local strategy and focus Limited local influence / R&D engagement Coherent strategy for local influence / R&D engagement Influential R&D Center and Technology Leader Competency / Maturity Lab Extension (Level 1) Competency Center Lab Extension Organization Impact A framework to grow R&D in China in a substantial and yet manageable way ® Intel China Research Center Intel confidential R&D Evolution Spanning 10 Years As R&D continues to grow & mature in PRC, it will develop deeper competencies and take on more local market influence World-class research Year 6-8 Year 3-5 Year 0-2 Establish initial presence Year 9+ Deep core competencies Imperatives: • Center of excellence/gravity • Research oriented • Local industry & market Imperatives: impact • Core competency & depth • Technology oriented • Initial local market influence Imperatives: • World class results • Broad industry impact • Part of effective global network Develop local capabilities Imperatives: • Capture local competencies • Development oriented • Close alignment w/US lab Where we are today ® Intel China Research Center Intel confidential Today’s Changing Environment World Order Changing Desirability for PC OEMs today very different from 10 years ago PC low on desirability in EM Channel Shift is happening CE and Communication Devices competing for Share of Wallets The rise of new customer base The next 1B New Usage Model Unique Requirements e.g., Power, connectivity, physical space Fragmented, Technology deprived, Affordability Need to lead and respond differently! ® Intel China Research Center Intel confidential The Future: Local Innovations Disruptive Innovations to Lead in Emerging Markets TAM Reach New customers Existing ‘channels’ Local Usage Oriented Innovation Sustaining Innovation Cost Reduction New Usage Models Local applications & solutions Catalyze markets Unique local requirements Create new opportunities Derivative Products Short Term < 1yr Time Longer Term Key to success lies in disruptive innovations and unique solutions for local needs ® Intel China Research Center Intel confidential Thank You! ® Intel China Research Center Intel confidential