President Barack Obama has been spending considerable time on East-West trade agreements while in Asia, but for one chip maker, the negotiations between China and Taiwan are even more important.

The two countries are slowly moving toward a formalized trade agreement, called the Economic Cooperation Framework Agreement, or ECFA, that will address how their economies relate to each another. Its first iteration isn’t expected until early 2010, but Taiwan-based tech companies are already hoping to gain entry to China’s massive consumer market.

That’s especially true for Via Technologies, a chip maker running a distant third behind industry heavyweights Intel (INTC) and Advanced Micro Devices (AMD). The company, founded in 1987, made a name for itself working on an underdeveloped part of the market: small, low-power chips.

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On Monday, researchers will release a twice-yearly list of the 500 biggest computers in the world. The latest rankings should provide some new clues about high tech’s relentless speed race, and how it’s being funded.

National labs and other research institutions buy these supercomputers to handle huge number-crunching tasks, like modeling weather patterns, nuclear explosions and aircraft designs. They rely heavily on advances from the semiconductor industry, since each system uses thousands of microprocessor chips–typically supplied by Intel, Advanced Micro Devices (AMD) and IBM (IBM).

Rankings on the so-called Top500 list are determined by performing a set of mathematical calculations known as Linpack that indicate how fast a system is.

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Comments by Advanced Micro Devices (AMD) yesterday apparently have triggered worries on the Street that the PC manufacturers, in their zealous optimism about the prospects for Microsoft Windows 7 (MSFT), may have built too many PCs.

As I noted last night, AMD said on its post-earnings conference call with the Street that it expects a less-than-seasonal sequential increase in Q4 revenues, due in part to the “the big build we’ve seen of PCs in anticipation of the Win 7 launch.”

That has triggered concerns that the PC industry has built too much inventory–and that it could result in both reduced component consumption in Q4 and beyond, and lower pricing for memory, which has benefited in recent weeks from higher NAND and DRAM prices.

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Intel (INTC) has admitted to some major gaffes in handling documents in an antitrust suit filed by Advanced Micro Devices (AMD), which is moving toward a trial next March. Now the chip giant says the shoe is on AMD’s foot.

Intel this week filed a motion seeking sanctions against AMD, alleging that its smaller rival failed to adequately retain and produce documents in the case and tried to hide its lapses. AMD rejects the allegations, characterizing them as an attempt to create a diversion from Intel’s own document-handling miscues.

The two companies believe the case–which AMD filed in June 2005, alleging that Intel abused its dominant market position–will generate more documents than any piece of civil litigation in U.S. history.

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Hardware freaks flocked to San Francisco last week to hear Intel (INTC) talk about microprocessors, the electronic brains in PCs. But Advanced Micro Devices (AMD) made some pretty brainy claims of its own.

The smaller Silicon Valley microprocessor maker expanded its focus several years ago by buying ATI Technologies, known for the chips called graphics processing units that generate realistic-looking scenery in videogames. AMD says the high-end GPU it announced last week sports a whopping 2.15 billion transistors.

That’s more features than any chip now for sale by Intel, which prides itself on packing the most tiny components on a given square of silicon. AMD used a production process at Taiwan Semiconductor Manufacturing Co. (TSM) that creates lines of circuitry measured at 40 nanometers, or billionths of a meter; that is a bit finer than the most advanced chips currently on the market from Intel, which have features rated at 45 nanometers.

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There was a time when people cared a lot about the microprocessors in their PCs–a bit like teenagers once bragged that their Impala had a 450-horsepower V8 engine under the hood. Advanced Micro Devices (AMD) seems to be betting those days are over.

The Silicon Valley company–perennial underdog to Intel (INTC) in the microprocessor wars–has been sending out signals that it wants to move away from marketing such chips based on how fast they are. Leslie Sobon, vice president of worldwide marketing, argues in an interview this week in TG Daily that customers don’t need to know that kind of techie stuff–what’s more important is what a PC with one of its chips does, what chores it’s best suited for. A new marketing campaign based on that concept, dubbed Vision, is expected to be announced Thursday.

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IBM (IBM) has often marched to a different drummer in computer chips. But Big Blue will take a step closer to conventional wisdom next year.

No, IBM is not moving away from developing electronic brains for its own servers, as most computer makers have. While some IBM servers do use the ubiquitous x86 chips designed by Intel (INTC) and Advanced Micro Devices (AMD), IBM continues to extend the internally-developed Power line of microprocessors for other systems as well as chips for IBM mainframes.

Yet IBM is taking a page out of rivals’ playbook with a chip called Power7 that is due in the first half of next year–not that the product doesn’t include some novel design concepts, too.

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There’s considerable doom and gloom hanging over this week’s Semicon West trade show in San Francisco. The event hosts suppliers of semiconductor manufacturing equipment and materials, one of the hardest-hit sectors in technology. Globalfoundries is one of few bright spots.

The new chip-manufacturing service, recently spun out from Advanced Micro Devices (AMD), is breaking ground this month on a $4.2 billion factory in New York state that marks a shift from a long-term pattern of moves by chip producers to Asia.

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Patrick Moorhead, vice president of advanced marketing at Advanced Micro Devices (AMD), is a prolific blogger and tweeter about issues of concern to the chip maker. One of his biggest pet peeves is how battery life is measured in laptops, a topic that he thinks is going to become very hot.

How hot? Well, Moorhead predicts that if the industry doesn’t come up with better ways to give consumers realistic estimates of battery life, the issue will be forced in one of two other ways: class-action suits will be brought on behalf of consumers, or an agency like the Federal Trade Commission will intervene. (Not that he is aware of either kind of action taking place yet, he hastens to add).

At a briefing Monday in San Francisco, Moorhead pulls out a bunch of advertising circulars from retailers, which include estimates of battery life for laptops that he contends are hopelessly unrealistic.

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No one can say for sure that antitrust regulators in Europe will levy a big fine against Intel (INTC) next week, or ever for that matter. But there don’t seem to be too many people betting against that possibility.

The Wall Street Journal reported on April 23 that European Union officials had prepared a draft decision calling for a fine against the chip maker, predicting that a final ruling could come as soon as May. (The EU, after a lengthy investigation triggered by complaints in 2000 by Advanced Micro Devices Inc. (AMD), brought initial charges against Intel in 2007). The updated speculation is that the world may learn next Wednesday whether EU regulators will come down with penalties against the Silicon Valley giant.

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Advanced Micro Devices (AMD) shares posted better-than-expected Q1 revenues, but also said Q2 revenues will be sequentially lower, due to macro conditions, limited visibility and historical seasonal patterns. Note that Intel (INTC) previously predicted flat revenue for the second quarter.

For the quarter, AMD reported revenue of $1.177 billion, flat with Q4, down 22 percent from a year ago, and well above the Street at $977.8 million. The company posted a loss of 66 cents a share, in line with expectations.

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Tessera Technologies (TSRA) shares have fallen nearly in half in late trading after the company announced that the Administrative Law Judge overseeing its patent infringement case before the International Trade Commission asserting violation of its wireless patents by a group of semiconductor companies had found no infringement.

The company said that the Initial Determination of the judge upheld the validity of the patents, but found no infringement. Tessera had asserted infringement against the ATI Technologies unit of Advanced Micro Devices, Fresscale Semiconductor, Motorola, Qualcomm, Spansion and STMicroelectronics.

Tessera said it is “disappointed” in the ruling and will review the decision before determining its next steps.

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It’s been a rough day for highly-leveraged semiconductor stocks.

In a research note this morning, Citigroup’s Glen Yeung provided a review of the credit liabilities of the chip companies Citi has under coverage. He notes that Advance Micro Devices (AMD), Spansion (SPSN), Infineon (IFX) and Qimonda (QI) all have debt coming due in the next 15 months. “In each instance, we point out that an already difficult financial position is compromised by the current credit market,” Yeung noted.

He also noted that AMD, MU and QI also rank among the chip companies with the worst interest coverage ratio.

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Dirk Meyer was six months out of college and working as an engineer for Intel when he ran into Bob Noyce, the company’s legendary co-founder and co-inventor of the integrated circuit, at the punch bowl at a shareholders meeting. “He talked to me for 30 minutes–some snot-nosed kid he’d never even heard of,” Meyer recalls. “He asked, ‘How do you like my company? What do you like? What are you confused about?’”

Noyce’s accessibility left a lasting impression–and today Meyer is making himself available for far tougher questions from the investment community in his new role as CEO of Intel arch rival Advanced Micro Devices (AMD).

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Bank of America’s Sumit Dhanda this morning upped his rating on Advanced Micro Devices (AMD) to Neutral from Sell, setting a price target of $6. “Having been consistently cautious on the stock since early 2006, we now believe that our thesis has largely played out–share losses to Intel (INTC), persistent pressure on cash flow/profitability, strain on the balance sheet–and that the stock has limited downside risk from current levels.”

He says longer-term headwinds remain, but that there are potential catalysts in the short-to-intermediate term, including improved free cash flow generation with the potential to reach break-even by Q4, reduced stress on the balance sheet as it finally shifts to an asset-lite strategy, and improved product uptake.

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