Chip Competition Leads Scientist To Fraud

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Chip Competition Leads Scientist To Fraud

By: David Utter
2006-05-15

A respected Chinese scientist has been accused of pilfering a Motorola design and passing it off as his own creation, in an attempt to satisfy demanding observers in Beijing.

Chip Competition Leads Scientist To Fraud

Chip Competition Leads Scientist To Fraud

Chen Jin should be the type of technology star that makes geeks everywhere proud. Three years ago, he transformed a doctorate from the University of Texas and work with Motorola in Austin into the unveiling of an amazing digital signal processing chip. China had begun to narrow the technology gap with the West.

Now, the Financial Times reports Chen's work was nothing more than theft. Beijing called him a fraud, and he has been dismissed from his post as dean of Jiaotong University.

Freescale (FSL) appears to be the victim of that fraud. The article noted how workers removed Freescale's name from chips and replaced it with Hanxin, the name of Chen's company.

Freescale produces embedded semiconductors for a variety of industries and purposes. The PowerPC chips this former division of Motorola produced formerly found their way into Apple's devices. Competition played a role when Apple switched from PowerPC to Intel (INTC) for its processor needs.

Intel has felt the impact of competition in its share price. The company has had a long-standing relationship with Dell Computer (DELL). But Dell had to issue guidance that its forthcoming numbers for the quarter will miss the company's expectations.

Dell is Intel's largest customer, and with slowing demand Dell has begun price-cutting promotions in an effort to reclaim market share it has lost to Hewlett-Packard (HPQ) in the global PC market.

A year of cost-cutting and other measures by HP CEO Mark Hurd seems to be paying off in the business server and PC market. HP has capitalized on the decline of Dell's once-lauded customer service policies; Dell's business customers have not been happy with the transition of customer service to outsourced firms in India or some of its other service changes.

Following along with HP's resurgence has been AMD (AMD). The chipmaker has longed for a greater part of Dell's business, which to date has been limited to a few server products.

AMD's dual-core processors have found their way into hardware like HP's Proliant server line and other products. The competitive wins HP has enjoyed in the market may eventually lead to Dell talking to AMD about expanding its presence in Dell hardware.

For now, it seems Dell wants to maintain its Intel relationship by boosting volume through promotional pricing. That may not be the best long-term strategy for the company, if service and quality issues continue to figure into corporate IT evaluations and purchases through 2006.

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Tags: Chen Jin, Freescale, Intel, AMD

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About the Author:
David Utter is a staff writer for InternetFinancialNews and WebProNews covering technology and business.


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