UPDATE 1-Intel chairman says perplexed by S.Korean ruling

Fri Jun 6, 2008 7:38am EDT

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(Adds comments from Intel CEO, views on Russian economy)

By Guy Faulconbridge

ST PETERSBURG, Russia, June 6 (Reuters) - The chairman of the world's No. 1 semiconductor maker, Intel Corp (INTC.O), said on Friday he was "perplexed" by South Korean regulators ruling that Intel had abused its dominant position in the local market.

"We obviously have expressed disappointment and a lack of understanding with the KFTS (Korean Fair Trade Commission) conclusion," Craig Barrett told Reuters.

"We are a bit perplexed," Barrett said on the sidelines of the Russian Economic Forum in St Petersburg. "We need to study the final document before deciding on a course of action. We have not even seen the final decision," he added.

South Korean regulators said on Thursday Intel had abused its dominant position in the local market and ordered the company to pay a fine of about $26 million.

The ruling, which follows a three-year probe, is being closely watched as similar antitrust investigations are under way in the United States and Europe. Intel's chief lawyer has said the company would almost certainly file an appeal.

Barrett said Intel would have to study the ruling closely before deciding what to do next.

Intel makes the central processing unit (CPU) chips at the heart of the world's personal computers and servers.

Barrett said that Russia and markets in the Commonwealth of Independent States (CIS), a group of former Soviet countries, were very strong for technology sales.

Most countries in the former Soviet Union are booming on the back of record oil prices and soaring domestic demand, pumping up hunger for personal computers, servers and IT solutions.

"Our business is expanding because the marketplace in both Russia and the CIS countries has been very strong. They are very good markets," he said. "This is perhaps one of the strongest growing emerging market areas.

"The general trend is that a lot of the growth for the IT industry is going to be in the emerging markets and I think Russia and the CIS countries are a good example of what is going on in emerging markets," Barrett said.

Russia's economy is booming for a tenth straight year, attracting record foreign investment. (Writing by Dmitry Zhdannikov and Guy Faulconbridge; Editing by David Holmes/Rory Channing)

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