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China-Japan-Koreas
Intel to Build $2.5B Factory in China
2007-03-26
BEIJING (AP) - Intel Corp. announced Monday it will build a $2.5 billion chip factory in China, giving the U.S. company a bigger presence in the booming Chinese market and boosting Beijing's efforts to attract high-tech investment.

The factory will supply chipsets to customers in China, which Intel expects to be the largest information technology market by the time the facility opens in 2010, Intel CEO Paul Otellini said at a news conference in the Great Hall of the People. Chipsets are computer chips that connect a microprocessor to other system components.

The facility in the northeastern city of Dalian will be Intel's first factory in Asia that will fabricate wafers, the thin silicon platters on which dozens of chips are etched, reflecting China's growing importance as a market for high-tech goods. It will boost the Santa Clara, Calif.-based company's investments in China to $4 billion.

"This project confirms and further enhances the strategic importance of China in our global strategy and in the IT industry around the world," Otellini said. "Our goal in China is to support a transition from 'manufactured in China' to 'innovated in China,'" he said.

The factory will use the most advanced circuit etching technology that the U.S. government will permit Intel to export to China at the time production begins, Otellini said.

The Chinese government said earlier that Intel will be using 90-nanometer technology _ which refers to making circuits 90 billionths of a meter in width. That is considered to be one to two generations behind Intel's most advanced technology.
The rest they can steal.
More at link.
Posted by:Bobby

#16  American business went to hell when major American corporations started thinking of themselves as "multi-nationals" rather than as major American corporations doing business worldwide.

Believe it or not, at one point the US government was paying American companies to relocate their businesses offshore. I've just spent the better part of an hour trying to find a cite for this but, unfortunately, the terms "offshore" and "relocation" swamp me with a plethora of recent links. What I've been trying to find is documentation about how the USA, in concert with the OAS (Organization of American States), actually provided financial incentives for American companies to relocate into the third world nations of the Carribean or Central and South America.

This sort of "help our little brown brother" self-immolation bullshit has been going on for decades, and has manifested in mature form with our transplanting of even the most sensitive technologies into the heartland of our very worst foes.

Anyone who has better cites on this, please post them. I know I read about this some two decades ago and it rankles me even now.
Posted by: Zenster   2007-03-26 22:51  

#15  American business went to hell when major American corporations started thinking of themselves as "multi-nationals" rather than as major American corporations doing business worldwide. Intel is just one more company giving away the store to the Chinese. Americans will ultimately pay a very high price for this short-term view and greed in the executive suites.
Posted by: Darrell   2007-03-26 21:13  

#14  Z: This sort of draconian import policy takes foreign investment or development and strangles it in the cradle. By comparison, China is like a wide open wild West economic frontier.

China has an excuse for lousy government - it's a non-hereditary iron-fisted dictatorship and has been that way since the Communist takeover. India has *chosen* its government since independence 60 years ago. India has, of its own free will, without the benefit of a state-run top-down propaganda machine like China, decided that colonialism is responsible for India's problems. There is no cure for such a willful, purblind obliviousness to reality.
Posted by: Zhang Fei   2007-03-26 21:02  

#13  All that's missing is a hamster wheel. The spark gap spheres at top are what gets me.
Posted by: Zenster   2007-03-26 20:25  

#12  That picture needs to go. Right now. It is far too funny for my own good. My testicles are in serious danger of exploding in a most unrewarding fashion.
Posted by: Mike N.   2007-03-26 20:02  

#11  So now Intel has (several) R&D centers in Israel, and a manufacturing plant in China. Interesting.
Posted by: gromgoru   2007-03-26 15:43  

#10  I predict that in less than five years after Intel opens this fab line, domestic knock-offs of these same circuits will appear on China's open market. These high tech facilities serve as nothing more (or less) than free training facilities for China's technicial elite. Once their skills have matured, the PLA routinely harvests seasoned fab workers to assist in military electronics R&D.

Solid state device fabrication represents one of the most strategic technologies that America possesses. Our network-centric war fighting style is increasingly dependent upon both microprocessors and, especially, high speed memory (DRAM). Outsourcing any of these manufacturing techniques is a direct threat to our nation's security.

Zhang Fei is absolutely correct regarding India. The last time I checked, India still taxes imports of used capital equipment at something on the order of 50% of its new value. This forces investors to install all brand new foreign machine tools and other basic machinery in facilities being opened under offshore investment. Just as often, due to their Byzantine legal code, these same facilities go out of business and the equipment is abandoned into the hands of unscrupulous investors or other market predators. It's either that, or buy India's crappy equipment. Remember, this is a country still struggling to build its own cars.

This sort of draconian import policy takes foreign investment or development and strangles it in the cradle. By comparison, China is like a wide open wild West economic frontier.
Posted by: Zenster   2007-03-26 15:22  

#9  There's some global logistics in this is as well, specific to chip fabs.

If the chips sit on a boat for 6 weeks waiting to get to China from some of the other fabs, much of the profit is lost to transit time. Cars, no big deal, chips that become obsolete over night after release, well not good.

Locating a fab in China, allows Intel to feed China and region from a larger plant without the transit losses.

Now for the inovate in China part, well, as others have posted, that will bite Intel one day.
Posted by: bombay   2007-03-26 12:31  

#8  China pirates many Western drugs. I believe India pirates *all* Western drugs. There's a whole other laundry list of things about India that brings to mind the ancient saying (from my college days) "the closer you get, the slower you walk".
Posted by: Zhang Fei   2007-03-26 12:12  

#7  TW: Why China instead of India?

Because China attaches fewer conditions on foreign investment. It is also why India will continue to lag China's growth for the next several decades. Unless India ends its 60 year experiment with a command-style economy with crony capitalistic characteristics. It may sound amazing, but China has a freer economy than India's. This, and not the brilliance of Chinese leadership, is why China is in the process of lapping India, and three times as many cars are sold in China per year.
Posted by: Zhang Fei   2007-03-26 12:06  

#6  Why China instead of India?
Posted by: trailing wife   2007-03-26 11:22  

#5  morons, this will bite them on the ass
Posted by: Dino Elmainter4016   2007-03-26 10:41  

#4  I'd say make sure your next computer uses AMD chips but AMD is probably not far from making their own deal with the commies.
Posted by: treo   2007-03-26 10:17  

#3  Great. Why don't we just surrender now and give them all our secrets?
Posted by: DarthVader   2007-03-26 09:25  

#2  "Our goal in China is to support a transition from 'manufactured in China' to 'innovated in China,'"...

and pirated and stolen by China.
Any way the Feds can step on this?
Posted by: tu3031   2007-03-26 09:17  

#1  The Chinese have to be elated about this one. They'll get the opportunity to steal not only designs, but have their officers work at the plant as senior managers. A treasure trove of high technology.
Posted by: gromky   2007-03-26 06:30  

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