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Intel sees IT industry to rally in H2 on economic stimulus move

CHINA'S information technology industry, which has also been affected by the global financial crisis, has touched the bottom and will rebound in the second half of this year, Intel Corp's China president said yesterday.

The IT industry will grow rapidly thanks to government measures and the convergence of telecommunications and personal computers will create a new market segment, Ian Yang, president of Intel Corp China, said yesterday in Shanghai.

"The toughest periods were the fourth quarter (of last year) and the first quarter. Now they have passed thanks to the government," Yang said.

In May, the output of China's IT manufacturers grew 4.3 percent year on year, against a 5.2 percent drop in the first quarter, according to the Ministry of Industry and Information Industry.

Amid the global financial crisis, China's IT exports were hit as the slowing economy eroded demand for mobile phones, PCs and other IT gadgets. China then unveiled a 4 trillion yuan (US$585 billion) stimulus package last year to boost the economy, which included spending on IT infrastructure nationwide.

Meanwhile, it also launched a "Home Appliance to Rural Areas" project which saw the government provide a 13 percent subsidy on authorized products such as TVs, personal computers and cell phones to boost purchases in rural areas.

The emergence of netbooks, a smaller version of notebooks, is expected to boost the demand for PCs. In China, sales of netbooks are expected to hit 20 million units, a jump of 124 percent year on year, according to CCW Research, a Beijing-based IT Consulting firm.

Intel, which provides Atom chips for netbooks, has also entered the mobile phone sector after China issued 3G licenses in January.

Intel, the world's biggest chip manufacturer, and Nokia announced last week that they will develop a new class of Intel architecture-based mobile computing devices and chip sets.



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