"With our first adoption of 0.13-micron production technology in the world in the first quarter, we can make a breakthrough in the Chinese mainland market," said Frank Jeng, VIA's Asia Pacific marketing director.

The technology enables the Taiwan-based company to cut the size of its chips to 55 square millimeters, while the sizes of its major competitors Advanced Micro Devices (AMD) and Intel are an average of 80 square millimeters and 130 millimeters respectively.

With the reduction of costs from smaller chips, the world's third largest personal computer CPU maker after US giants Intel and AMD said it will take 16 per cent of commercial use computer market on the Chinese mainland this year, or about 960,000 chips. The focus will be on education, industrial engineering, finance, taxation and the public security sectors.

VIA officials said that 10 million computers will be sold on the Chinese mainland this year, 9.6 per cent of which will be equipped with C3 processors.

Henry Tang, VIA's special assistant to the president, said the company would rely on distributors with an industrial background and an ability to provider integrated solutions. It has already signed 20 such distributors.

Low price is the most forceful weapon of VIA Technologies. A computer equipped with C3 800-megahertz processor is sold at less than 2,000 yuan (US$250), while computers equipped with Intel's Celeron 700-megahertz and 1-gigahertz are sold at 3,400 yuan (US$410) and 3,700 yuan (US$450) respectively.

"Lots of schools in western regions cannot afford to have computers, but with the cheap but rich functions of our processors, it is no longer a dream but a reality," said Paul Hsu, head of VIA's CPU division.

But some analysts are skeptical of VIA's goals. Said Wilson Wan, deputy general manager of the information technology (IT) market researcher International Data Corporation China said: "VIA isn't strong enough to take that big market share now, considering its products."

The lowest clock speed of Intel and AMD processors is already above 1-gigahertz, but VIA's highest product is only 933-megahertz.

Wan said VIA's rivals Intel and AMD are also shifting attention to industrial users and computers with their processors costing about 3,000 yuan (US$360), so VIA does not have much advantage in pricing.

(China Daily August 13, 2002)