Intel may build fab in China

By Ann Steffora Mutschler -- Electronic News, 3/23/2007

Amid a flurry of news reports saying that Santa Clara, CA-based chip giant Intel Corp. is set to announce plans Monday for a chip fabrication facility in Northern China, the company is keeping a tight lip.

If true, this move would mark a major shift in the strained trade relations between the United States and China, and give Intel a leg up with customers in the Asia Pacific region.

Officials in the Santa Clara, Calif.-based headquarters for Intel have not yet replied to requests for comment, but other reports have said Intel president and CEO Paul S. Otellini will hold a news conference Monday at the Great Hall of the People in Beijing on “Intel’s commitment in China.”

China’s National Development and Reform Commission economic planning agency reportedly approved this month the construction by Intel of a $2.5 billion chipset fabrication plant in the northeastern city of Dalian, but Intel has not confirmed this report.

Supposedly, the rumored plant would have a monthly capacity of 52,000 chips on 90-nm manufacturing process technology. Given that Intel is currently ramping 45-nm technology, industry watchers have speculated that bringing in less-than-cutting-edge technology would help Intel avoid problems with technology export controls from the U.S. government.

Intel reportedly employs approximately 5,000 in China already in two assembly and test sites in China, and two R&D facilities. According to the company’s website today, the company has 127 jobs open in its China operations.