Intel breaks ground for $2.5b chip factory in China

Intel held a groundbreaking ceremony for its first chip factory in China, expanding its presence in the booming Chinese computer industry and boosting Beijing's campaign to lure foreign high-tech investment, an Associated Press report said.

The Associated Press report said the $2.5 billion (euro1.8 billion) facility, one of the biggest single foreign investments in China, will be Intel's first silicon-wafer fabrication plant in Asia and its eighth worldwide. It is due to open in 2010 with a work force of 1,200.

The new factory, dubbed 'Fab 68,' will produce chipsets, which connect microprocessors to other computer components.

Intel said it chose not to equip the plant with its most advanced processes because of US restrictions on high-tech exports, according to the report.

The groundbreaking ceremony was attended by Intel chairman Craig Barrett, a deputy chairman of the Chinese Cabinet's main planning agency and the mayor of this northeastern port city, which is a growing center for the software and computer industries, the report further said.

Intel said China already is its second-largest market after the US and is expected to be the world's biggest information technology market by 2010.