Intel's $2.5bn China chip plant

[shinigamiX]

Intel is to build a $2.5bn (£1.3bn) computer chip plant in China, boosting the country's high-tech industry.

It will be Intel's first integrated wafer plant in Asia, serving the US firm's "fastest-growing" market.

"This project confirms... the strategic importance of China in our global strategy and the IT industry around the world," said Intel boss Paul Otellini.

However, the technology used in the plant is at least a generation behind Intel's most advanced computer chips.

Intel already employs more than 6,000 people in China, making memory chips at factories in Shanghai and Chengdu.

China innovation

The new factory, where production is scheduled to begin in 2010, will use 90-nanometre technology.

It will be based in the port city of Dalian, in the north-east of China.

"China is our fastest growing major market, and we believe it is critical that we invest in markets that will provide for future growth to better serve our customers," said Mr Otellini.

Intel wanted to "support a transition from 'manufactured in China to 'innovated in China'," he said.

Zhan Xiaoqiang, vice chairman of China's National Development and Reform Commission, said he hoped the new factory would "bring more value-added research projects" to the region.

The new factory will take Intel's total investment in China to $4bn.

From the BBC

 

[carlhungis]

Yea i just posted a similar story in vern's china exporting updates thread. It looks to be a chipset factory and the process tech is being limited by the US government in terms of how advanced of a process that can be exported to china.
http://news.yahoo.com/s/ap/20070326/ap_on_bi_ge/china_intel;_ylt=ApioQOTM3hvMBr15qDB8IqbMWM0F

Even if the US govt had no say in what tech Intel was using over there, Intel would still limit the fab to processes that are no longer cutting edge. They know full well that China could screw them at the drop of a hat and acquire the technology as their own. They would have too much to loose by putting the top of the line processes over there and they know it.

 

[wolverinero79]

Darn, it's actually real and official.

I see financial positives for Intel in this, but I also see two significant negatives...

1.) Intel is using this as a war cry for other US companies to do the same. In a couple articles, Paul even says that they're trying to attract other high tech to push towards China. As we all know, this eventually leads to large companies paying off government officials to overlook export law violations, or bills to relax the export laws in general. In essence, this merely weakens the US economy further.

2.) Intel is most likely using this as a competative strategy. By getting a fab there first and pushing other companies to start investing more in China, they are trying to take Chinese government loyalty. The goal, most likely, being to shut AMD out of the Chinese market completely. China is fiercely loyal and I'm sure government officials will push for homegrown chip usage rather than from outside the country. It won't create anti-trust lawsuits since China would be the country where the lawsuits would be coming from. Who knows, maybe the EU will decide they have jurisdiction in Asia :lol:

Bottom line, this is a great day for China, but a bad day for CPU consumers and the US. Note that Intel's stock still isn't up on this announcement (although most likely that's from home data). Intel has the most to benefit from this, and investors still aren't swayed :-D.

 

[wolverinero79]

Yea i just posted a similar story in vern's china exporting updates thread. It looks to be a chipset factory and the process tech is being limited by the US government in terms of how advanced of a process that can be exported to china.
http://news.yahoo.com/s/ap/20070326/ap_on_bi_ge/china_intel;_ylt=ApioQOTM3hvMBr15qDB8IqbMWM0F

Even if the US govt had no say in what tech Intel was using over there, Intel would still limit the fab to processes that are no longer cutting edge. They know full well that China could screw them at the drop of a hat and acquire the technology as their own. They would have too much to loose by putting the top of the line processes over there and they know it.

As I said before, I hope this happens (I really do). Corporate America needs to learn a harsh lesson in dealing with China.

"What fab, Paul? You have no fab here!"

 

[Periander]

Intel expects the fab to be its lowest cost site by the time it comes on line. For the first time, the company won't use its "copy exact" mode of ramping a facility " basically using existing protocol to speedily get a facility up and running. That's a bedrock principle of Intel manufacturing.

http://www.eetimes.com/news/semi/showArticle.jhtml;jsessionid=TGJ31JLR2YH1KQSNDLRSKH0CJUNN2JVN?articleID=198500601

If they were buying new manufacturing equipment for this, they wouldn't be deviating from copy exact. IMHO this is telling us that that they will be using this fab as a dumping ground for their manufacturing equipment that no longer has a place in their front line fabs.

 

[mazzapan]

the communist flag flies high and proud over ho-chi minh city, we need to teach corporate america a lesson about doing business with those red ... wait, that's where my brand new sneakers are from. Ya know, Vietnam is a really nice place to be honest.

 

[Major_Spittle]

Nice to see that America still stands for people's rights and personal freedom, that is unless Corporate America can turn a nickel by them having no freedom. :x

As President Regan and Thomas Jefferson roll in their graves.