'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.

Fab 68, which started construction in 2007, is Intel's first factory at a new site since 1992 and eighth in its global network of 300mm wafer fabrication facilities. The company expected the number of skilled, well-paid employees in the factory will reach 1,500 this quarter from about 900 earlier this year.

The Dalian plant has started up on Intel's advanced 65 nanometer process technology, in which the 300mm wafers contain hundreds of dies with transistor line widths 1,400 times thinner than a strand of human hair. Intel makes about 10 billion transistors per second in the process of manufacturing hundreds of millions of chips annually at its factories.

Otellini said Intel planned to continue investing on the mainland to support the government's innovation agenda.

The chipmaker has already established a large assembly and test site in Chengdu, and various research and development laboratories, including in Beijing and Shanghai.

Getting a head start

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

The US-based chipmaker has so far invested this much, in US dollars, on the mainland: $4.7b