US chip giant Intel announced on 26 March it would build a $2.5 billion plant in China, giving the US company a bigger presence in the booming Chinese market and boosting Beijing’s effort to attract high-tech investment.It is expected to herald what some analysts see as a fundamental transformation in the nation’s role as a manufacturing power.
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.
The integrated wafer plant, called Fab 68, will be Intel’s first of its kind in Asia, and will be located in the northeast Chinese port city of Dalian, the company said in a statement issued ahead of a signing ceremony in Beijing.
The announcement came two weeks after the Chinese government let Intel’s secret slip by announcing that it had granted permission to build the factory.The government is trying to attract such facilities in hopes they will help China evolve from a low-cost manufacturing centre into a creator of profitable advanced technologies.
“China is our fastest-growing major market and we believe it’s critical that we invest in markets that will provide for future growth to better serve our customers,” said Paul Otellini in the statement.“Fab 68 will be our first new wafer fab at a new site in 15 years... This new investment will bring our total to just under $4 billion, making Intel one of the largest foreign investors in China.”
Construction on Fab 68, which will produce 300-millimetre (12-inch) integrated wafers, is scheduled to begin later this year with production projected to begin in the first half of 2010, the statement said.
It is the first time since 1992, when Intel built 10 plants in Ireland, that the company has built a fab from the ground up at a brand new site, it said.
When completed, Fab 68 will become part of Intel’s manufacturing network to include eight 300-millimetre factories in 2010 with other fabs located in the United States, Ireland and Israel, the statement said.The planned manufacturing facility is seen as part of China’s gradual movement up the value-added chain.So far it has been the centre of labour-intensive assembly of finished parts, mostly imported from more advanced economies.
The Intel plant could herald a gradual transformation of China’s economy and its positioning as a centre for more sophisticated parts production, analysts have said.