Intel to Lean Heavily on India

Confirming that India is in fact becoming the next high-tech hub for Silicon Valley heavyweights, Intel Corp. raised the stakes Thursday by announcing plans to pump $130 million into its Bangalore, India-based operations over the next three to five years.

Intel first established a Bangalore facility three years ago for the development of software that supports Internet-based applications for PCs and network computers.

According to the Press Trust of India, the Santa Clara-based chipmaker is also intending to triple the number of engineers at its Bangalore facilities to an estimated 3,000.

The Bangalore location is Intel’s largest software development site outside the United States.

On a two-day tour of Asia, Intel Chief Executive Craig Barrett was quoted by the Press Trust as saying that Intel has also appointed a chip design team to develop high-end microprocessors.

The design team will start off with 40 engineers, said Barrett, and is expected to double over the next few years.

“There is, however, no thinking on setting up any manufacturing facility in India at least at the moment,” Barrett was quoted as saying.

India’s Communications and Information Technology Minister Pramod Mahajan and Barrett both signed a memorandum of understanding to work together on education and e-governance in India, the Press Trust reported.

“I am happy to announce that Intel has decided to invest $130 million for the expansion of its operations in India,” Mahajan was quoted as saying.

Today’s announcement marks a growing trend among technology companies that are building and expanding operations in India.

Oracle Corp. has been cultivating a presence in India since 1991 alongside other technology multinationals like IBM, Sun Microsystems, Cisco Systems Inc., and Microsoft Corp.

American technology companies seeking out a cheaper, more highly educated labor force have contributed an estimated $10 billion to the Indian economy over recent years, according to reports, and many heavily concentrated high-tech cities like Hyderabad and Bangalore are said to closely resemble Silicon Valley business culture.

Just last month, Oracle enlarged its India footprint by expanding its Bangalore development facilities and purchasing a reported seven acres of land in Hyderabad for the expansion of its India Development Center. Oracle plans to hire 1,800 additional employees over the next few years.

Intel’s CEO Barrett also made a stopover in Vietnam on his Asia tour where he expressed interest in developing a technology industry in one of the poorest, most underdeveloped technology regions in the world. Although Barrett did not commit to the idea of building an Intel manufacturing facility any time soon.

Intel currently maintains very limited operations in Hanoi.

“I think the opportunity is very strong for developing a technology industry here in Vietnam,” Barrett was quoted as saying by the San Jose Mercury News.

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