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Intel, chips away at western Teck lead
Written by Daniel   
Monday, 26 March 2007 07:38

Intel to produce chips in China
By Michael Kanellos
Staff Writer, CNET
Published: March 25, 2007, 9:00 PM PDT

Intel has announced that it will open a wafer fabrication facility in China, a significant milestone in the chip giant's manufacturing history.
As reported earlier, the plant will be located in an industrial rust-belt hub in northeast China called Dalian in the Liaoning Province and will cost around $2.5 billion to build. The Chinese government is providing financial incentives to Intel, according to company spokesman Chuck Mulloy, and has built up the infrastructure around the city.

Chips will start coming out of the factory in the first half of 2010. Initially, Intel will make chipsets--which shuttle data back and forth across the processor to the microprocessor of the computer--and possibly communications chips.

The decision to concentrate on chipsets, rather than flash memory or processors, derives from U.S. regulations that prevent domestic companies from bringing cutting-edge chipmaking equipment to China. Generally, U.S. companies can only bring in so-called N-2 equipment, or equipment that's two generations behind the most advanced contemporary standard. The restrictions exist to prevent China (among others) from using the machinery for chips for advanced weapons.

"They will have this older process technology over there, and it is much better suited for making chipsets," said Dean McCarron, principal analyst at Mercury Research.

The definition of chipsets is broad, Mulloy said, and can include WiMax and Wi-Fi chips, cellular chips or traditional chipsets. Many of Intel's communication chips now get made by Taiwan Semiconductor Manufacturing Co. (TSMC)

Although Intel has been in China for more than two decades and operates laboratories and testing and packaging facilities, the Dalian factory will be Intel's first facility in China--or in any developing nation for that matter--to actually produce chips. The plant will be the main topic of discussion at the Intel Developer Forum taking place in Beijing in mid-April.... More

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