China approves USD 2.5 billion Intel Corp. chip plant

Intel Corp. has received approval to build a US$2.5 billion (EUR1.9 billion) chip plant in China, the government said Tuesday, amid booming Chinese demand for chips used in personal computers and mobile phones.

The factory is planned for the northeastern city of Dalian, the cabinet's National Development and Reform Commission, the country's top economic planning agency, said on its Web site.

Intel, the world's largest semiconductor maker, has not revealed plans to build a chip plant in Dalian. An Intel spokeswoman in Beijing, Nancy Zhang, did not respond to a phone message but sent an e-mail saying Intel has made no announcement.

Demand for chips in China has soared as the country has risen to become the world's biggest population of mobile phone users and computer sales grow rapidly.

The communist government wants Chinese companies to spend more on developing profitable technology and is encouraging foreign companies to move high-tech facilities to China.

The Intel factory approved for Dalian would use advanced 90-nanometer technology, the NDRC announcement said.

Intel has 6,000 employees in China and factories in Shanghai and the western city of Chengdu making memory chips, microprocessors and other products, according to the company's Web site.

The Intel facility in Dalian would be one of China's biggest single foreign-financed projects if the company invested the full US$2.5 billion (EUR1.9 billion) cited in the government announcement, reports AP.

The biggest foreign investment in China to date is a US$4.3 billion (EUR3.3 billion) petrochemical plant being built by Royal Dutch/Shell Group and two Chinese partners on the country's southeastern coast.

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