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Intel investing US$1.6 billion in its Chinese chip plants

by Mark Tyson on 4 December 2014, 13:35

Tags: Intel (NASDAQ:INTC)

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We have more Intel in China news today as the Silicon Valley chipmaking stalwart has made public plans to invest US$1.6 billion in China over the next 15 years. The cash will be used to expand its chipmaking plants in Chengdu, China.

The large investment by Intel would be used for both upgrading its current chipmaking factories and "introducing an advanced-testing technology to China," reports the WSJ. The new investment dwarf's Intel's previous $600 million used to set up this Chinese facility.

This information comes hot on the heels of the news that Intel will be making new partnerships with chipmakers in China and expecting those companies, including the likes of Rockchip and Tsinghua Unigroup, to distance themselves from ARM. Also just a couple of weeks ago we heard that Intel was merging its mobile chip unit into its PC chip business.

China is keen on investment into the country with semiconductors strategically targeted by US$5 billion of extra government funding to "increase chip production, enhance facilities for chip design and testing, and support mergers to create bigger players". This looks like it might have paid off with Intel's action.

Intel is expected to make use of the upgraded Chinese facilities to improve the attractiveness of its mobile chip portfolio. A mutually beneficial deal seems to have been struck: "Bringing our newest 'Advanced Test Technology' to China is our promise to innovate together with China," said William Holt, Intel executive vice president and general manager, technology and manufacturing group, in a statement seen by the Wall Street Journal.



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