AMD (Advanced Micro Devices) and tianjin sea ray Advanced technology investment co., LTD. (THATIC) to reach an agreement, will set up a joint venture production of X86 processors for the Chinese server market, the details of the patent license is highly confidential. China has been want through investments and acquisitions to reduce dependence on foreign technology. Microprocessor technology is one of the chip strategy in China, Chinese companies have been working on server chips based on ARM architecture, storage technology and is trying to develop and purchase, the server design and manufacture of production localization of industry chain.

According to the agreement, AMD provide x86 chip technology licensing to the joint venture company, the joint venture company will use the technology to develop server chips sold only in China. In return, AMD is expected to get $293 million license fees and royalties, also will be a joint venture of chip sales royalties. AMD has six straight quarterly net loss and cut by more than 5%, need to open the situation in the Chinese market.

Recently one of China's biggest buyers network service become the server and prompted Intel rivals to establish joint venture to break the monopoly on server chips. At the same time, this joint venture will allow Chinese companies to use their own security electronic circuit chip development.

On x86 chip market, in 2015, Intel 87.7% share, AMD (12.1%), Taiwan via accounted for less than 1%. Most enterprise data center using the x86 chips server, especially the large-scale network service. Intel accounted for 99.4% of the share in the enterprise data center. Once account for almost one-third of AMD server market, only 0.6% of the share.

Tianjin sea ray advanced technology investment co., LTD., the shareholders behind for the Chinese academy of sciences and a listed company, called zhongke dawn the company research, development, production and manufacturing of high performance computer, generic server and storage products, the development of world-class supercomputer based on X86 processors. Tirias Research analyst Jim McGregor (Jim McGregor) on AMD's new joint venture, said: "the meaning is profound, the Chinese market is one of the important battlefield next generation server."

AMD's chief executive, Su Zi feng (Lisa Su) has previously said that plans to use the existing intellectual property rights, find new ways to obtain revenue. Su Zi feng said in a prepared statement: "the new licensing agreement is an excellent case, shows we use a powerful combination of IP, accelerate the adoption of the market of AMD's technology."

Previously, Intel, qualcomm, IBM has combined Chinese partners for building high performance chip server market. Some analysts said the AMD in order to show sincerity and on the Chinese server market brand, will take out the most dangerous of Zen of Intel architecture processors.

In AMD the deal comes as the United States recently banned the sale of one of the largest communication oems in China zte products, because of its alleged communication system sales to Iran. In such an environment, zte and other large Chinese server manufacturers may be more welcome local supply of key parts. Including alibaba, baidu, tencent, netease, the main Chinese server client, also hope to purchase more cheap Chinese made in local server products.

Recently, us regulators stepped up to the Chinese capital of high-tech investment. AMD Su Zi feng's chief executive, said, however, permits for all Chinese joint venture technology is AMD's technology, no property rights, regulatory issues will not happen.

It involves Intel's core interests, the company could block the deal, but the Chinese joint venture company has clearly won the technology.