China’s cabinet has approved a $2.5 billion investment plan by Intel Corp. in a microchip plant in the northeastern city of Dalian. The approval was confirmed by the National Development and Reform Commission on Tuesday. The decision to approve chip-manufacturing plant in China was taken amid booming Chinese demand for chips used in personal computers and mobile phones.
Though Intel has refuse to confirm the construction plans, but rumors have been taking rounds for some time about company’s plan to set up a manufacturing plant in China. However, the company has already made explicit its intention of setting up manufacturing plant in mainland China.
The prospective plant could be a major breakthrough for China’s efforts to build a strong semiconductor sector. However, the approval is expected to raise concerns in the US over the transfer of strategic manufacturing technology to a potential economic and military rival. According to the NDRC, the plant would be able to produce chipsets with details as fine as 90 nanometres across on 300mm silicon wafers. The plant is expected to have capacity of producing 52,000 chips in a month.
Intel will be investing for the first time in a manufacturing facility in China. However, it has already invested around $1 billion in the mainland, where it has major test and assembly plants in Shanghai and the interior city of Chengdu. The company while speaking on its overseas investment plan has also indicated that t would invest more than $1 billion over five years to expand its operations in India.
