Chip makers Intel and AMD face off against each other from across half the country back in their home market. Here in China, they share an office building.AMD last year moved into a shiny new headquarters commanding a sweeping view of Beijing, joining its rival in a pair of buildings connected by a walkway. AMD's business in China is more than doubling each year, says Thomas Tong, an AMD manager here. Last fall, the company held its board meeting in Beijing and said x86 technology could be designed in China for the first time. AMD's China president reports to CEO Hector Ruiz, who's identified the country as the company's most important growth market.

The No. 2 computer chip maker is trying to broaden its product line here. A "big chunk" of AMD's revenue in China is from chips for desktop PCs; it owns about 30% of the market. But its share of server chips is just 7%, much lower than in the U.S. AMD is hiring sales staff to try to change that. This week, it announced a deal with Dell to put Opteron chips in Dell servers.

A couple of days earlier, I'd headed to Intel's China Research Lab Northwest of central Beijing. A government-sponsored ad on the side of a bus reads, "Refuse piracy. Use authentic copies." That's a new development here. Along the busy road leading to the place are China's two most prestigious universities, Tsinghua and Peking, various technology and science institutes, and multilevel computer emporiums carrying China's latest PCs, cell phones, and digital cameras. Bicyclists pulling wagons carry customers' orders out. A lot of tech companies locate research in Beijing, near the top schools, and manufacturing in Shanghai and further South.

Intel collected a little less than $6 billion in revenues in China last year, or about 8.5% of total sales. The company's China lab is working on wireless broadband Internet access, developed technology announced in September for letting other companies' co-processors connect right to its Core chips, and is working on video-processing and other apps that can push demand for multicore chips, said John Du, general manager of Intel's China Research Center in a phone interview from Beijing last month.

During my visit, Intel researcher Yimin Zhang, manager of the lab's software applications research group, shows work that lets multi-processor systems identify key moments in a video stream. In one demonstration, the system can pull the interesting moments from a soccer match without making the viewer watch the whole thing. Surveillance, not surprisingly, is also an area of interest.

For more on Aaron Ricadela's trip to China, see:

Friendship, Peace, Cooperation, Development

Sliced Duck And Sharp Views With Reed Hundt

In Search Of The Chinese Cell-Phone/TV/Broadband Junkie

And listen to this podcast: Special Report: Live From China