China microprocessor developer scrambles for funds

Mike Clendenin
(03/28/2005 8:24 AM EST)

  TAIPEI, Taiwan — One of China's earliest microprocessor developers, BLX IC Design Corp., Ltd., is struggling to find cash to keep its product development on track after one of its main investors declined to deliver on more funding.

The company is looking for more backers and considering the option of selling the company or just its intellectual property, according to sources familiar with the company's operations. Its longtime CEO, David Shen, has also left the company.

BLX made a splash when it first arrived on the China scene, saying it was developing a microprocessor that would rival Intel Corp. The company was born of a government-sponsored project that sought to make China less dependent on foreign suppliers for key technology components.

In 2002, after more than three years of work, the Chinese startup launched the country's first commercial 32-bit microprocessor, a 266-MHz standard cell implementation of a proprietary architecture based on the MIPS instruction set. A year later, the company bumped the clock speed to 500 MHz and was deep into development of a 64-bit version.

When Chinese researchers were first designing the chip, called Godson-1, they had servers in mind and sought to cooperate with Boris Babaian, the renown Russian computer scientist who led development of the E2K architecture. The E2K supposedly had three to five times the performance of Intel's Merced, while using less power and requiring a cheaper manufacturing process. But after talks with the Russians broke down over licensing fees, the Chinese group scaled back its plans and settled on the embedded market, which wasn't as flashy but had much higher volumes. For instance, there are more than 200,000 intermediary schools in China the government would like to equip with a low-cost PC infrastructure, and broadband use is rapidly growing.

The company was never able to get the foothold it needed, however, despite claiming to have rallied local industry support around its architecture that extended to 60 companies, including Haier, a major manufacturer of appliances and consumer electronics in China.