Intel chip plant to energize China

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BEIJING (AP) -- Intel Corp.'s plan to build a chip factory in China is a victory for the country's campaign to attract high-tech investment that it hopes will speed development of its own technology industries.

Intel CEO Paul Otellini, in announcing the $2.5 billion wafer fabrication plant, pledged support for China's effort to transform itself from a low-cost factory to a creator of technology.

"Our goal in China is to support a transition from 'manufactured in China' to 'innovated in China,' " Mr. Otellini said yesterday at a ceremony attended by Chinese and U.S. officials in the Great Hall of the People.

The factory, which Intel acknowledges will not be equipped with its latest technology, will be the Santa Clara, Calif., company's first "chip fab" in Asia and its eighth worldwide. It is scheduled to open in 2010 in the northeastern city of Dalian.

Mr. Otellini and Chinese officials at the ceremony expressed hope the facility will have a "cluster effect," drawing other high-tech business to Dalian and nurturing Chinese supporting industries.

Beijing aggressively lobbies companies to move high-tech operations to China in industries ranging from aerospace to telecommunications, hoping its own companies can learn from them and jump ahead.

"It's pretty broad-based. It spans everything from high-speed trains to the aviation sector," said William Hess, a senior analyst in Beijing for the consulting company Global Insight. "Those are areas where foreign companies have been dominant, and China is looking to claw back some of that territory."