BIZCHINA / Top Biz News
Intel plans $2.5b chip project
(Xinhua/Agencies)
Updated: 2007-03-26 15:28
Intel Corp announced Monday it will build a $2.5 billion chip factory in
China, giving the U.S. company a bigger presence in the booming Chinese
market and boosting Beijing's effort to attract high-tech investment.
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The factory will produce chipsets, a key component in personal computers,
mobile phones and other products, Intel President and CEO Paul Otellini
said at a news conference in Beijing.
The facility in the northeastern city of Dalian will be Intel's first
wafer fabrication factory in Asia and its first built from scratch since
1992, reflecting China's growing importance as a market for high-tech
goods.
It will boost the Santa Clara, California-based, company's investments in
China to $4 billion.
Intel Corp's Chief Executive Paul Otellini smiles at a news conference in
Beijing, March 26, 2007. Chip giant Intel said on Monday it would invest
$2.5 billion to build a microchip plant in northeastern China, with the
production of chipsets to begin in 2010. [Reuters]
"This project confirms and further enhances the strategic importance of
China in our global strategy and in the IT industry around the world,"
Otellini said.
"Our goal in China is to support a transition from 'manufactured in
China' to 'innovated in China,"' he said.
The factory will use the most advanced circuit etching technology that
the U.S. government will permit Intel to export to China at the time
production begins, Otellini said.The announcement Monday came two weeks
after the Chinese government let Intel's secret slip by announcing that
it had granted permission to build the factory.
The Intel factory will be China's biggest foreign high-tech investment to
date.
The government is trying to attract such facilities in hopes they will
help China evolve from a low-cost manufacturing center into a creator of
profitable advanced technologies.
The government hopes the new Intel factory will "bring more value-added
research projects" to Dalian, said Zhang Xiaoqiang, vice chairman of
China's top planning agency, the National Development and Reform
Commission.
Intel President and CEO Paul Otellini speaks at the signing ceremony in
Beijing March 26, 2007. [sina]
The 12-inch (300-millimetre) integrated wafer plant in Dalian city in
northeast China's Liaoning province would have a monthly capacity of
52,000 chips. Intel now operates such factories in the United States,
Ireland and Israel.
Intel, which has invested about US$1 billion in China so far, already has
assembly and test operations in the eastern municipality of Shanghai and
Chengdu City in the southwest.
At 90 nanometers, the chips made in Dalian would be some of the most
advanced semiconductors manufactured in China.
Construction of the plant will start before the end of this year, Intel
said.
Intel is in the midst of a major overhaul, including price and job cuts
and new product roll-outs, as it works to stave off recent advances by
rival Advanced Micro Devices Inc., which has gained market share in the
last few years.
Intel, which entered the China market in 1985, has over 6,000 employees
working on assembly, testing, research and development and sales and
marketing in 16 cities there, according to the company's Web site.
Intel said last month it would make China an independent sales and
marketing region from the beginning of 2007, underlining the country's
growing importance as the company's second-largest consumer market after
the United States.
Demand for chips in China has soared as the country has risen to become
the world's largest population of mobile phone users and as computer
sales grow rapidly.
The government wants Chinese companies to spend more on developing
profitable technology and is encouraging foreign companies to move
high-tech facilities to China.
(For more biz stories, please visit Industry Updates)
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