BEIJING – Intel, the world’s largest chipmaker, has won China’s approval to build its first semiconductor manufacturing factory in Asia.
“Approval for the project was given by the central government,” Gao Fujun, assistant counsel at the Dalian Foreign Trade and Economic Cooperation Bureau, said Thursday. He declined to say when the project was approved.
Intel may join Taiwan Semiconductor Manufacturing and Hynix Semiconductor in building chip factories in China, where growth is outpacing all major economies. China has been competing with India to attract investments from overseas technology companies.
The plant, which may make computer processor chips, may cost $3 billion to $3.5 billion to build, said Rick Hsu, an analyst at Nomura Securities in Taipei.
Intel also needs to receive U.S. government approval to export its manufacturing technology to China, Hsu said. The company may choose not to produce its most advanced microprocessors in China to ensure that it receives a U.S. technology export license.
China is welcoming investments from overseas and drafting financial incentives to domestic chipmakers to cultivate the country’s semiconductor industry.
“It’s good for China as it will have a cluster effect” in attracting other technology-related investments, said Donald Lu, a Beijing-based analyst at Goldman Gaohua Securities. “It will help attract equipment vendors to set up facilities in China, which would in turn help Chinese companies.”
Chinese chipmakers face obstacles when buying advanced equipment from the United States that may be used for military purposes. Under the Wassenaar Arrangement, equipment vendors and Chinese companies need to get government approval for sale of advanced technologies.
Semiconductor Manufacturing International, China’s biggest chipmaker, is still awaiting approval from the U.S. Export-Import Bank for its application for a loan guarantee to buy equipment worth $750 million from Applied Materials.
“Intel would have to lobby the U.S. government to free up regulations to allow for them to export advanced nanotechnology to China,” Hsu said.
Intel’s first facility for manufacturing chips in China would be based in the Dalian Economic and Technological Development Zone, Gao said. Intel has assembly and testing plants in Shanghai and Chengdu.
Intel may announce its plans to build a Chinese chip factory next month, The Financial Times reported Thursday, citing industry officials whom it did not identify.
“Intel routinely evaluates sites for potential future facilities,” said Nancy Zhang, a spokeswoman at Intel China, in an e-mailed statement.
“We don’t comment on our site selection process until that process is complete,” she added.
The Intel chairman, Craig Barrett, said on Nov. 2 that the company was awaiting a government report from India on semiconductor manufacturing before investing there.
The decision would depend on the incentives that the Indian government chose to offer, he said during a visit.
Fuente: International Herald Tribune