US software giant Intel Corporation and China's largest online games firm Shanda Networking yesterday signed an agreement to drive forward the development of digital home technology, said Wednesday's China Daily.

The companies signed a memorandum of understanding which undertakes to advance interactive gaming and digital home entertainment, said John Antone, vice-president of Intel's Sales and Marketing Group for the Asia-Pacific Region.

China's online gaming and entertainment industry is experiencing rapid growth, with more than 54 million gamers and 187 million Internet users in the nation by 2008.

"Intel's collaboration with Shanda will create immersive entertainment experiences for consumers, which will in turn help drive PC and broadband usage in China," Antone said.

The agreement means that the two sides will focus on developing total online interactive entertainment solutions for a variety of devices including PCs, TV set-top boxes and mobile phones based on Intel chip architecture.

Shanda Networking Chairman Chen Tianqiao said the two companies will also establish a digital home and game testing and innovation centre.

"We will focus on creating client, content and infrastructure solutions for the online entertainment business," said Chen, who is also the chief executive officer of Shanda.

The signing of the agreement is part of Intel's strategic development in China, according to company insiders.

Antone added that the firm was currently in discussions with both the central and local governments on the firm's future investment plans in China.

Intel currently runs two campuses in Shanghai - at Pudong's Waigaoqiao Free Trade Zone and Changning District's Shanghaimart.

And it plans to open a third campus at Shanghai Zizhu Science-Based Industrial Park in the city's Minhang District in 2005, according to Antone.

Intel will also expand its Waigaoqiao site with the acquisition of 28,000 square metres of land from the Xin Development Corporation, at a cost of US$39 million.

The expansion involves the construction of additional office buildings and laboratories on the campus, bringing Intel's total capital investment at Waigaoqiao to US$539 million.

Employees engaged in research and development will move to the third Intel campus at Zizhu in 2005. The company will lease 22,300 square metres of land from the park for the new offices and laboratories.

"The new campus will include space for future expansion as Intel participates in global research projects," Antone said.

(China Daily)