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Intel starts building $2.5 bln chip plant in China

On Saturday, US computer chip giant Intel Corp. broke ground on its first chipset plant in Asia, a project which involves $2.5 billion in the first round of investment.

Intel Corp. Chairman Craig Barrett attended the ground breaking ceremony of the plant, which is located in northeast China's Dalian Economic and Technological Development Zone. Barrett said at the ceremony that Intel chose Dalian because it is a perfectly suitable location for the plant. “Intel will use its advanced equipment and technology to build an environment- friendly computer chip factory in the city, and promote the semiconductor manufacturing industry in China,” he said.

Kirby Jefferson, general manager of the plant, said they have started recruiting staff from China and overseas, and are concentrating efforts on constructing the new plant.

The project, which was announced in March, is Intel’s first chipset factory in Asia and part of its network of eight such facilities worldwide. The plant will go into production in 2010. The ceremony was also attended by senior officials including Zhang Xiaoqiang, vice minister of the National Development and Reform Commission (NDRC), China’s top planning body, and Dalian's mayor Xia Deren.

“The integrated circuit sector is one of the leading industries in China. The Chinese government has been furthering the opening- up and technological upgrading of the industry. I think Intel has made the right decision,” Zhang said. “Intel’s Dalian plant is a new breakthrough of economic and technological cooperation between China and the United States, and it will also be a push for the development of China’s northeast, a former heavy industry base,” said Xia. T

he city government of Dalian estimates the plant can provide about 1,700 jobs.

The new factory, dubbed “Fab 68," will use 90-nanometer technology, an advanced chip-making method that measures its work 90 billionths of a meter, the most advanced technology that the US government has licensed for export, Paul Otellini, Intel president and CEO, stated in March. Intel’s investment is part of growing foreign investment in China’s computer and other technological fields.

The Chinese government encourages foreign companies to establish more research and development centers in China, Chinese Premier Wen Jiabao said at the opening session of the Inaugural Annual Meeting of the New Champions hosted by the World Economic Forum on Thursday. China will unswervingly stick to its policy of opening-up and protect foreign investors’ legal rights by improving concerned laws and regulations, Wen said. (