Intel has just announced its Q2 2010 earnings. It is the best quarter in the company’s 42 year history. Some of you might say, “what?!” With the financial crisis in Europe and the U.S., how can this be possible? Here is a direct link to their Q2 2010 report.
You will see in the report Intel’s revenue is derived 57% from “Asia-Pacific” excluding Japan. With Japan’s 11%, the whole of Asia accounts for nearly 70% of Intel’s revenue! China’s roaring economy is likely contributing a significant portion towards this record earnings. It is a little wonder that Intel is building a new fab in China (300mm fab in the northern Dalian using state of the art 90nm technology). Toyota too builds auto plants in the U.S., and for the same reasons: it would be too politically insensitive to not given how much Toyota derives its revenue from the U.S..
Of course, contrast Intel with Google (see “Google vs. China – Good vs. Evil?“) and the difference between these two companies are glaring. In February 2010, Intel Capital (Intel’s investment arm) announced partnership with China Investment Corporation (CIC), China’s sovereign wealth fund:
Under the agreement, CIC and Intel Capital will explore investments outside of China, combining resources to both evaluate potential investments and support companies in their next stages of development. While the scope of investment opportunities will be global, there will be cross border opportunities that will benefit both the U.S. and China.
Google has thus far done a lot to antagonize the Chinese government – and – intended or not, the majority of Chinese netizens think Google is disrespectful of Chinese law. Google’s management is not stupid. The only conclusion I’ll draw is that Google does not expect to be a long term player in the search market in China.