Intel was one of the earliest western companies to venture into China and has realized significant success by any measure. The semiconductor company generates a quarter of its annual revenue from China. In 2021, that was 21 billion dollars. These factors were critical to the outcome.
Intel long enjoyed the envied status of being able to “allocate” its sales, meaning it decided which customers to sell its microprocessors to.
Unlike in more basic industries, such as clothing or home appliances, where China quickly caught up, semiconductors required advanced technological capabilities that China didn’t have. Intel long enjoyed the envied status of being able to “allocate” its sales, meaning it decided which customers to sell its microprocessors to.
Intel aligned its business with China’s national priorities
Intel aligned its business with China’s national priorities. It was the first foreign company to heed the government’s “Going West” directive and made the single largest foreign investment at the time in the Northeast China, where the government had called for investment.
Building close relationships with executives at headquarters was important to Intel China’s success
Andy Grove, the late CEO of intel believed that China would be the next big thing for Intel and insisted that every board member visit China at least once a year. That gave Intel China opportunities to build close relationships with executives at the headquarters, who were more likely to advocate for China.