Over the past few weeks the big semiconductor manufacturing buzz has been the rumors revolving around Intel’s next 300mm fab. On March 26th, Intel finally made it official. They will be locating their next greenfield fab in Dalian, China, a city in the Northeastern region of the country. Not only is this their first fab in Asia, its Intel’s first new location since 1992. The fab is expected to begin production in 2010, cost $2.5 billion and employ 1500. Initial production will be targeted at chipsets, processed on a technology node which will most likely be at least two generations behind Intel’s most advanced chips.
Yes, this is big news. Most economic development officials drool over the prospect of enticing a company like Intel to build a factory in their region. Intel’s presence adds a lot more than just the highly skilled employment opportunities the company provides. Intel has grown in Arizona, New Mexico, and Israel. The support services from equipment and material vendors adds a whole host of additional economic enhancements for the area.
Intel says they made their site selection not for the economic incentives and not for the lower labor costs. It was primarily a strategic move. China, and Asia overall, is the fastest growing region for electronic manufacturing and domestic consumption of electronics in the world. It is also a region where Intel’s competitor has recently made major headway. Not only does this move provide Intel with a means to increase competitive pressure on AMD but it also enhances Intel’s ability to meet its goal of expanding into high growth consumer markets and Asia regions.