China Approves $2.5B Intel Corp. Plant
Intel Corp. has received approval to build a $2.5 billion chip plant in China
amid booming Chinese demand for chips used in personal computers and mobile
phones, the government said Tuesday.
The factory is planned for the northeastern city of Dalian, the cabinet's National
Development and Reform Commission, the country's top economic planning agency,
said on its Web site.
Intel, the world's largest semiconductor maker, has not revealed plans to build
a chip plant in Dalian. Intel officials in Beijing and the chipmaker's headquarters
in Santa Clara, Calif., declined to comment, saying the company has not made
a formal announcement.
Demand for chips in China has soared as the country has risen to become the
world's largest population of mobile phone users and as computer sales grow
The communist government wants Chinese companies to spend more on developing
profitable technology and is encouraging foreign companies to move high-tech
facilities to China.
The Intel factory approved for Dalian would use 90-nanometer technology, the
NDRC announcement said.
One key way the chip industry measures manufacturing sophistication is the
size of the circuitry, and the process Intel plans to use in the China facility
means the chip parts will be shrunken down to 90 nanometers, or 90 billionths
of a meter.
That suggests that Intel plans to use the facility to manufacture flash memory
chips and chipsets, which act as a PC's central nervous system by sending data
from the microprocessor to other parts of the computer.
Intel currently uses the 90-nanometer process at factories in California, New
Mexico, Ireland and Israel to make chipsets and flash memory chips based on
the NOR architecture. It also makes flash chips based on the NAND architecture
on the 90-nanometer process through a joint venture with memory chip maker Micron
Technology Inc. NAND flash is a type of memory used in digital music players
and digital cameras.
Intel and Advanced Micro Devices Inc. are spending heavily to upgrade their
factories in other parts of the world to handle microprocessors that need more
advanced technology than factories producing chipsets and flash memory. The
smaller circuitry allows companies to drive down production costs and boost
performance by squeezing more transistors onto the same slice of silicon.
Intel currently makes most of its advanced microprocessors on 65-nanometer
technology and said production is slated to begin in the second half of this
year on the next-generation 45-nanometer technology. The transistors on chips
built on the 45-nanometer process are so small that 30 million of them could
fit onto the head of a single pin.
Intel has 6,000 employees in China and factories in Shanghai and the western
city of Chengdu making memory chips, microprocessors and other products, according
to the company's Web site.
The Intel facility in Dalian would be one of China's biggest single foreign-financed
projects if the company invested the full $2.5 billion cited in the government
The biggest foreign investment in China to date is a $4.3 billion petrochemical
plant being built by Royal Dutch/Shell Group and two Chinese partners on the
country's southeastern coast.