Intel to start fab plant in China

RELIABLE SOURCES TELL the INQUIRER that by the year 2005 there's likely to be an Intel fabrication plant located in mainland China.

And the firm is also planning on boosting its presence in Malaysia and another unnamed Asian country, we have learned.

Intel already has a Chinese research centre in Beijing, to which it is actively recruiting staff, and a flash memory factory in Shanghai. But a fab in mainland China has obvious advantages. It would give Intel direct access to distribution channels, avoid punishing tariffs, and of course, labour costs would be much reduced.

The Chinese government also has an active policy of favouring locally based firms, and its own ambitious project to develop CPUs.

More importantly, and as we've reported here before, the majority of Intel's revenues come from outside its home territory, and analysts predict the vast majority of semiconductor growth in the next five to 10 years will be in the Chinese marketplace.

Local engineering expertise and infrastructure is also much improved in mainland China, and there's a steady brain drain of designers from Taiwan, too.

The Beijing research centre already has an ambitious programme for software development, as you can see by clicking on this Intel page.

But an Intel fab on the mainland is likely to be built near the Shanghai area, which is already a hotbed of semiconductor development. µ

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