Monday, May 13, 2002		On Hardware

Intel Corporation CEO Craig Barrett and Shanghai vice mayor Zhou Yupeng (R) put a huge "Pentium 4 microprocessor" on the world map during a ceremony at its plant in Shanghai's Pudong district. Barrett announced that the company is expanding its existing operation in Shanghai so the facility can assemble and test the world's highest performance desktop microprocessors.

US semiconductor giant Intel Corp said last week it was setting up facilities to assemble and test Pentium 4 chips at its Shanghai plant, but has no immediate plans to set up a wafer fab in China.

"What we are now seeing is assembly and test technology and that is taking wafers and cutting them into individual chips, assembling them and then testing them here," Intel CEO Craig Barrett told a news conference.

Intel said the new facility for the Pentiums, built on 0.13 micron technology, would be completed by the end of this year and the microprocessors bearing "Made in China" stamps would be produced in the first half of 2003. Intel currently makes its chips in the United States and Ireland then ships them to be assembled and tested in the Philippines, Malaysia and Costa Rica, company officials said.

Barrett said he expected output at the Shanghai facility, which Intel poured $302 million into last September on top of an initial $198 million investment, to match the three other plants, though that might require some time. The Shanghai plant tests and assembles FLASH memory chips used in handsets and hand-held computers.

There is also a production line to test and assemble i845 chipsets -which control the flow of data between various chips in a computer - for Pentium 4 microprocessors based on the 0.18 micron technology, Intel said.

Although some Taiwan-backed firms, such as Grace Semiconductor and Semiconductor Manufacturing International Corp, have set up chip-making facilities in China due to the potentially huge domestic market, Intel has so such plans yet, Barrett said. "At this point in time we have no plans for wafer fab manufacturing but we continue to investigate the options," Barrett said.

"The general areas we will look at would be the availability of the labour force, the cost of doing business, the infrastructure," he said.

"There has to be a strong infrastructure in place to support the basic utilities, chemicals and the process equipment that we use," he said. The Shanghai facility expects to employ 3,000 people in Shanghai by 2004 from about 1,200 now, Intel officials said.