China starts building x86 processors based on AMD's Zen architecture

Another player has emerged in the x86 scene, joining Intel, AMD, and VIA Technologies. That player is Hygon, a chipmaker in China that is now mass-producing x86 processors codenamed "Dhyana" using IP licensed from AMD.

It's an interesting arrangement on AMD's part. Officially, AMD does not sell its final CPU blueprints to its partners in China, and instead allows them to design their own processors for the server market. However, Dhyna is said to be similar to AMD's Epyc line, and maybe even carbon copies, save for the vendor IDs and family series numbers, TomsHardware reports

What's also interesting is that AMD managed to pull this off despite various US regulation hurdles and x86 cross-licensing restrictions with Intel. So how did it happen?

Back in 2016, AMD established a joint venture with Haiguang Microelectronics Company (HMC), a Chinese state-owned company in which AMD has a 51 percent stake. As part of that deal, AMD agreed to license its Zen architecture to Hygon, in which AMD owns a 30 percent stake.

"HMC owns the x86 IP and ends up producing the chips, which satisfies the AMD and Intel x86 cross-licensing agreements because the IP remains with a company owned primarily by AMD," TomsHardware explains.

The arrangement is a bit more convoluted than that, to ensure that AMD doesn't run afoul of its cross-licensing agreement with Intel. The way it works is HMC licenses the IP to Hygon, which designs the x86 chips and sells the design back to HMC. The final design is then sent out to a foundry (TSMC or China Foundries) for production. After all that, HMC transfers the chips back to Hygon, which then sells the Dhyana CPUs to customers.

Those chips can only be sold in China, and specifically to the Chinese server market. There happens to be a big data center market in China, so there is the potential for AMD to rake in a lot of royalties from this arrangement.

It's not clear if AMD will try to expand this arrangement to include desktop processors as well.