Intel announces new China chip plant

27 Mar 2007

(Associated Press via NewsEdge) Intel Corp.'s plan to build a chip factory in China is a victory for China's campaign to attract high-tech investment that it hopes will speed development of its own technology industries.

Intel CEO Paul Otellini, announcing the $2.5 billion wafer fabrication plant, pledged support for China's effort to transform itself from a low-cost factory to a creator of technology.

'Our goal in China is to support a transition from `manufactured in China' to `innovated in China,'' Otellini said at a ceremony attended by Chinese and US officials in the Great Hall of the People.

The factory, which Intel acknowledges will not be equipped with its latest technology, will be the firm's first 'chip fab' in Asia and its eighth worldwide. It is due to open in 2010 in the northeastern city of Dalian.

Otellini and Chinese officials at the ceremony expressed hope the facility will have a 'cluster effect,' drawing other high-tech business to Dalian and nurturing Chinese supporting industries.

Beijing aggressively lobbies companies to move high-tech operations to China in industries ranging from aerospace to telecommunications, hoping its own companies can learn from them and jump ahead.

Otellini said Intel received incentives to locate its new factory, dubbed Fab 68, in China but would give no details. 'Let me just say they are very fair,' he said.

Otellini acknowledged that Intel faces hurdles due to US controls on exports of sensitive technology.

He said the Dalian factory will use the most advanced technology that US officials will allow Intel to export.

© 2007 The Associated Press

© 2007 Dialog, a Thomson business. All rights reserved

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