Intel to Build Major Plant in China

Intel Tuesday confirmed that it is investing US$375 million into an assembly and test plant in the western part of China.

The Santa Clara, Calif.-based chip making giant said construction of the facility in the city of Chengdu in Sichuan province should start in the second part of 2004 and is expected to open for business sometime in 2005 or 2006. The company said it will and employ about 675 people, mostly locals.

The plan is to infuse upwards of US$200 million to get the project started with the remaining balance being spread out as needed.

Back in 2001, Intel invested US$302 million to further expand its chip manufacturing facility in Shanghai to validate, test and assemble the Intel 845 chipset for the company’s Pentium 4 processor platform.

Apart from the Chengdu and Shanghai facilities, Intel’s presence in China already includes the Intel China Research Center in Beijing, the Intel Architecture Lab in Shanghai, and several R&D organizations. The company first launched its Chinese operations in 1985, and currently has more than a dozen representative offices on the Mainland. This is the first time Intel has picked a location for a plant in the western region of the country.

The announcement is just the latest in a series of moves the No. 1 chipmaker has been making to expand its presence in Asia. Currently, about 40 percent of Intel’s sales come from the Asia-Pacific region.

Company CEO Craig Barrett was on hand in Penang, Malaysia earlier this week to help launch a $40 million design and development center. Barrett said his company is looking at investing in China, India and Russia next year for new growth opportunities and expanding its plants in Malaysia and the Philippines.

As part of his annual trip to Asia, Barrett is expected to meet with South Korean president Roh Moo-hyun. Sources tell the Korea Herald that the government there will ask Intel to “consider finalizing a major investment project,” something in the magnitude of either a research center or a chip factory.

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