The company plans to hire 120 engineers in the southern Indian city by the end of next year and insists no engineers in the United States or elsewhere will lose jobs.
"We continue to hire in all our centers," said Keith Hawkins, design director of AMD's computation products division. "I am just happy to offload some of my workload here."
The company already runs design and engineering centers in Sunnyvale, Calif., Austin, Texas, and Dresden, Germany.
Hawkins said AMD's Indian engineers will likely work with U.S. teams on the company's new technology initiatives, including the sophisticated 64-bit computer chips. The company plans to spend $5 million over three years in creating the center.
Scores of U.S. companies farm out software development, back-office, and engineering design work to India, to benefit from low wages and plentiful skilled workers.
AMD's bigger rival, Intel Corp., and chip makers such as Texas Instruments, Silicon Laboratories, and Flextronics have already moved part of their design work to India.
Intel says it is increasing its staff strength to 3,000 from about 2,000 and investing $100 million within a year in its Bangalore center.