Intel confirms Plan to Build its 8th 300mm Wafer Fab in China
US chip giant Intel Corp. on Monday announced its plans to build its first computer-chip manufacturing plant in China, a US $2.5 billion investment that could lead the largest semiconductor manufacturing company to a greater presence in the booming Chinese market.
Intel's planned wafer-fabrication facility, to be constructed in the coastal Northeast China city of Dalian in Liaoning Province to produce 12-inch (300-millimetre) integrated wafer, and will be the Santa Clara, California-based company's first wafer fab in Asia, complimenting a network spread across the United States, Ireland and Israel, the company said in a statement.
"China is our fastest-growing major market and we believe it's critical that we invest in markets that will provide for future growth to better serve our customers," said Intel President and CEO Paul Otellini.
The wafer fabrication facility, to be called Fab 68, will be one of Intel's eight factories around the world, and will be the most-advanced facility in China, where the chip maker already operates chip assembly and test plants.
Intel has invested US$1.3 billion in the past two decades in assembly, test and research and development facilities in China, and the company has assembly and test operations in the eastern municipality of Shanghai and Chengdu in the southwest, Otellini said.
"Fab 68 will be our first new wafer fab at a new site in 15 years. Intel has been involved in China for more than 22 years and over that time we’ve invested in excess of $1.3 billion in assembly test facilities and research and development. This new investment will bring our total to just under $4 billion, making Intel one of the largest foreign investors in China," he added.
Construction on Fab 68 is scheduled to begin before the end of this year with production projected to begin in the first half of 2010. Initial production will be dedicated to chipsets to support Intel's core microprocessor business.
The new project will make Intel one of the largest foreign high-tech investors in China with nearly US$4 billion of investment, and will give Intel, which has been losing market share to Advanced Micro Devices Inc. (AMD), better access to computer factories in China, the world's biggest market for chips.
The plant will have a monthly capacity of 52,000 wafers and will use 90-nanometre technology, which refers to making circuits 90 billionths of a meter wide, to produce chip sets, and will employ 1,500 people when fully operational. The 300mm-wafers lower production cost per chip while consuming 40% less energy and water per chip than a 200mm wafer factory.
Intel’s announcement comes two weeks after the Chinese government approved Intel's application for a wafer fabrication facility, known as "fabs" in the industry.
The Chinese government anticipates that facilities will help China transform from a low-cost manufacturing center into a creator of profitable advanced technologies.
"We welcome Intel and other multinational companies to invest and cooperate with China. We support Intel's initiative to expand and strengthen cooperation with relevant parties in a number of areas, such as talent training, technology standards, improved information technology for rural areas and digital health, to promote the mutual benefit and win-win of Intel and the information industry of China, and to achieve the goal of growing together," said Zhang Xiaoqiang, vice chairman of China’s National Development and Reform Commission.
Shares of Intel jumped 11 cents to $19.27 in NASDAQ Stock Market trading on March 23. They have dipped 4.8 percent this year.
