Trend: Tech companies are investing in qualified workers and the infrastructure outside the US.
Chip industry rivals Intel and Advanced Micro Devices are facing off on a major new battleground: India.
Intel (INTC) said Monday it plans to spend more than $1 billion in that country over the next five years. The effort will add to the $700 million that Intel has already pumped into India.
AMD, (AMD) Intel's biggest competitor in personal computer chips, also has deepened its ties to India. Last week the company signed an agreement with the SemIndia consortium. AMD is licensing its flagship chip design to SemIndia, a group of Indian chipmakers that plans to build a $3 billion factory.
The lure for both Intel and AMD is clear, analysts say. India has emerged as both a supplier and consumer of chips. And its workers offer top-notch technical skills and English proficiency — at relatively low wages.
Both Intel and AMD already get most of their revenue from outside the U.S. Future growth for the two companies will mainly come from overseas, analysts say.
Intel's India plan, detailed by company executives on Monday, is a long-term strategy. "What we're laying out is a multiyear plan," said Sri-ram Viswanathan, vice president of Intel Capital, the company's investment arm.
There are three main reasons Intel is investing in India, Viswanathan says.
First, Intel looks to tap the resources and talents of Indian workers for its own development and design work. The fact that India's primary language is English gives the country an edge in that type of work vs. other developing nations, such as China and Russia.
Second, Intel sees India as a vital new market for chips, Viswanathan says.
And third, Intel needs to invest in India to streamline the country's chip industry. India won't live up to its potential as a chip market if certain structural issues aren't fixed, Viswanathan says.
AMD, meanwhile, has forged licensing deals with a wide range of other companies — including IBM (IBM) and Samsung. "For them, the big driver is collaboration with others," Eunice said.
Intel, the No. 1 maker of chips, had revenue of $34 billion last year. That compares with AMD's $5 billion. AMD relies on partners to do what it can't do alone.