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Will Intel build a 90nm fab in China?

Posted: 22 Mar 2007     Print Version  Bookmark and Share

Keywords:Intel  wafer fab  90nm  wafer plant 

Reports about the construction of an Intel Corp. 90nm wafer fab in Dalian, China had the industry abuzz with varied speculations—some expect the company will confirm plans for the fab next week while others expressed doubt that the project will happen at all.

The upcoming visit of Intel CEO Paul Otellini to China next week has fuelled talks that the company will confirm plans for a 12inch wafer plant in Dalian. Some expect the confirmation will be made at the company's news conference on March 26 in Beijing at the Great Hall of the People.

Last week, Intel won approval to build a Rs.11,030.00 crore ($2.5 billion), 12inch wafer plant in northern China for CPU chipsets, according to a statement issued by China's National Development and Reform Commission (NDRC).

According to the NDRC, the plant will use 90nm technology and produce 52,000 wafers a month at full capacity. Meanwhile, analysts have already weighed in on the proposal, speculating that Intel will more likely use 65nm technology by the time the plant comes on line in 2008.

Taking a different side on the issue, Gartner Inc. analyst Bob Johnson dismissed the idea as 'wishful thinking' by Chinese authorities. Putting down a Rs.11,030.00 crore ($2.5 billion), trailing-edge 90nm wafer fab in China is contrary to previous patterns of Intel behaviour, he said.

Johnson's argument is twofold. He pointed out that Intel's manufacturing strategy is to continuously stay at the leading edge of technology and that by the time a China fab using 90nm technology was up and running it will be ramping 32nm manufacturing. Secondly, Johnson said that Intel favours putting fabs where it already has them so that both manufacturing plants benefit from economies of scale. Intel has not put a plant down on a Greenfield site for many years and is unlikely to resume the practice in China, Johnson argued.

Johnson concluded that landing a major Intel fab will be a coup of the highest order for China, but is basically wishful thinking on their behalf.

With reports from Mike Clendenin and Peter Clarke, EE Times

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