Intel launches US$2.5b wafer production factory in Dalian

Semiconductor giant Intel marked a new milestone in 25 years of investment in China with yesterday's commercial launch in Dalian of the company's first wafer fabrication facility in Asia.

The US$2.5 billion plant, which Intel refers to as Fab 68, produces chipsets for laptop and desktop personal computers, and high-performance enterprise servers.

Intel chief executive Paul Otellini said the 163,000 square metre Dalian factory opened up broad new opportunities for economic development on the mainland, where the US-based chipmaker has so far invested US$4.7 billion.

'This manufacturing facility helps deliver on our vision to contribute to sustainable growth in China while giving us better proximity to serve our customers in Asia,' Otellini said.

Xia Deren, the Communist Party secretary of Dalian, in Liaoning province, said the opening of the most advanced chip plant on the mainland would help establish the city as an information technology hub and attract other hi-tech firms.

Intel has started doing business with more than 80 existing suppliers based in Dalian.

Commercial operations of the new plant come at a time when the appetite for semiconductors has become healthy again and production of electronic devices on the mainland continues to grow. Market research firm IDC forecast global semiconductor revenue to reach US$274 billion this year, primarily driven by laptop computer demand, and US$295 billion next year due to strong enterprise spending.