Intel Corp., the world’s largest semiconductor maker, has confirmed that it is planning to build its first computer-chip factory in China. The firm is likely to invest $2.5 billion in a country that assembles 50 percent of the world’s personal computers. However, the approval of the project required years of planning and negotiations with Chinese officials and authorities. The leading semiconductor maker will be benefited in more delicate ways as the firm is widely perceived as a more substantial player in China’s economy.
The project is expected to be announced on Monday by Chief Executive Paul Otellini in an unusual event at the Great Hall of the People, a site usually used for government meetings, representing a remarkable change in the Chinese policies. The new plant will produce 12-inch (300-millimetre) integrated wafer. Intel at present operates such factories in the U.S., Ireland and Israel.
Intel has already made investment to the tune of about one billion U.S. dollars in China so far. The firm already operates assembly and test operations in the eastern municipality of Shanghai and Chengdu City in the southwest. Construction on the fab, known as fab 68, has been planned to start later this year, with production expected to begin in the first half of 2010. The plant will be located in China’s Dalian and to begin with the plant will produce chipsets.
The facility in the northeastern city of Dalian has marked the Intel’s first factory in Asia that will manufacture wafers, the thin silicon platters on which dozens of chips are etched. The move has also reflected China’s growing importance as a market for high-tech products. In addition to it, the planned plant will boost the Santa Clara, California-based company’s investments in China somewhere close to $4 billion.
However, the project has already sparked off concerns the United States about technology transfer and the continued buildup of higher-end production work and jobs overseas.
