Intel to build $2.5 billion chip plant in China

Posted by Frederick Roberts

Santa Clara (CA) - Intel has confirmed that it is to build a $2.5 billion wafer fabrication facility in China which is set to manufacture its first chips by early 2010. The Chinese government is providing Intel financial incentives to build the plant which will be located in the north of China.

The company will be focusing its Chinese efforts on chipsets rather than more advanced elements such as flash memory or processors owing to US legislation which prevents US companies from bringing cutting-edge equipment to China, for security reasons.

"This project confirms... the strategic importance of China in our global strategy and the IT industry around the world," said Intel boss Paul Otellini. While Intel has had a presence in China for over two decades now, this will be the first actual manufacturing that will be done in the country.