Low-cost chip is made for China
A new computer chip embedded with the Linux operating system may change the way computers in the mainland are defined.
The V-Dragon, developed by Hong Kong-based Culturecom, is a 400-megahertz PowerPC processor embedded with the Midori Linux operating system and Chinese character generation technology.
Culturecom has so far invested $400 million in developing the chip.
Company chairman Frank Cheung Wai-tung believes the new chip may help replace costly Wintel systems in the mainland.
'Cost savings are expected to be approximately 70 per cent,' he said.
Mr Cheung said this was achievable because 50 per cent to 70 per cent of the manufacturing cost of a typical PC went on licence fees to Microsoft and Intel.
Intel chips account for nearly 90 per cent of the mainland PC market, while Windows, often pirated, accounts for the most PC-based operating systems.
China is the world's second-largest PC market, with 13.3 million units sold last year. But the computer penetration rate in mainland households remains low. Only 15 per cent of computers are used at home while 85 per cent are owned by commercial enterprises and the government.
Benjamin Lau, senior corporate strategist at Culturecom, said: 'The cost of a Wintel PC is too high for ordinary Chinese households, especially those in the rural areas. Moreover, English, as the main medium for PCs today, is intimidating for the general public in China.'
Mr Lau said he envisioned a thin client computer - complete with LCD monitor and peripherals, with a Chinese interface, capable of internet browsing and running office applications - selling at less than 1,500 yuan. At that price, the computer could conceivably reach every household in the mainland. In recent years, Culturecom has developed a Linux office suite, RedOffice. Last July it bought Midori, an embedded version of the Linux operating system. Once the new chip is ready, the company will be a step closer to its dream.
While hoping one day to challenge technology's giants in the Chinese general-purpose computing market, Culturecom is targeting its V-Dragon chip at the market for embedded Linux devices and special-purpose computers.
The company is estimated to have sold 1.6 million of its V-Dragon chips, priced at US$25 to $30, since they were announced in July.
China's Datang Telecom Technology and Industry Group has ordered 300,000 of the chips for use in special-purpose computers for processing land taxes in local government offices, and Culturecom has also taken orders for a million chips from Orient Semiconductor Electronics of Taiwan, which will use them in home entertainment systems.
