Intel chips away at China market
By Zheng Lifei (China Daily)
Updated: 2005-12-07 06:41

CHENGDU: Intel, the world's largest chipmaker, yesterday opened its second chip plant in China, in a move to cement its position in this fast-growing market.

Intel Products Chengdu Ltd, a chip assembly and test factory located in the capital city of Western China's Sichuan Province, started production yesterday.

"The opening of this facility brings new manufacturing capabilities to China and further strengthens the country's ability to deliver products to the worldwide market," said Craig Barrett, Intel's chairman, at yesterday's opening ceremony.

Intel made an initial investment of US$375 million in 2003 and earlier this year it added US$75 million to this, bringing the total investment in the Chengdu facility to US$450 million.

The plant is expected to assemble Intel's cutting-edge Pentium 4 processors.

The assembly line began operations yesterday at the Chengdu plant, with a second facility scheduled to start production in 2007.

The global chip giant has another assembly and test facility in Shanghai, set up with a total investment of US$500 million.

China is the world's second largest computer market in the world after the United States. According to the market intelligence firm International Data Corp, the shipment of computers in China grew by about 30 per cent year-on-year in the third quarter to 5.2 million units.

Intel has been trying to shorten the supply chain with its Chinese customers, which has instigated the move to set up two assembly and test plants in China.

However, competition with its archrival AMD is also currently warming up.

AMD, a minor player in the microprocessor market, has been aggressively investing in order to progress in China.

It has recently opened a similar factory to Intel's plant in Suzhou, in East China's Jiangsu Province with an investment of US$100 million.

It has allied with several computer makers in the country including top player Lenovo Group, in an attempt to challenge Intel's current dominance in the market.

It also announced last month that it is to license its microprocessor design technology to Chinese partners in order to help them design chips for industrial use, by adopting international level core microprocessor technology.

(China Daily 12/07/2005 page10)