Intel to invest up to $1.6 bn in Chengdu chip plant

Intel, world leader in computer chip technology, said it would invest up to $1.6 billion over the next 15 years in its chip plant in Chengdu, China, in continuation of its expansion in the country, The Wall Street Journal reported.

The move is seen by analysts as an initiative by Intel, which is extremely bullish on China to boost its presence in the mobile sector, where its market share remains low.

China, on its part  has been more than welcoming of new chip investment, as is sees semiconductors as a strategic sector that it seeks to build up.

According to Intel its new investment would go towards upgrading facilities to assemble and test chips, and introduce an advanced-testing technology to China.

Intel had earlier invested $600 million in its Chengdu facility.

''Bringing our newest 'Advanced Test Technology' to China is our promise to innovate together with China,'' said William Holt, Intel executive vice president and general manager, technology and manufacturing group, in a statement.

The announcement comes after Intel's strategic agreements this year with two Chinese chip-design firms that supply processors for many of the world's low-cost smartphones.

The chipmaker said in September that it would invest $1.5 billion to buy a 20-per cent stake in Tsinghua Unigroup Ltd, a state-owned firm that owns China's second- and third-largest chip designers.

As part of the upgrade, it would bring its most advanced chip-testing technology to China receiving local and regional government support for construction in exchange, according to its statement, Reuters reported.

Holt said in the statement. "The fully upgraded Chengdu plant will help the Chinese semiconductor industry and boost regional economic growth."

Three months ago, Intel acquired a minority stake in a government-controlled semiconductor company to jointly design and distribute mobile chips, an industry that China considers to be of strategic importance.

In contrast, Qualcomm Inc is expected to announce a potentially record-breaking settlement with Chinese anti-trust regulators in the coming days (See: Qualcomm faulted by China body for overcharging, dominance abuse).

China's investigation of San Diego-based Qualcomm, and of several recent probes against firms including Microsoft Corp, had led to an outcry from foreign business lobbies. According to the companies the Chinese government was increasingly adopting strong-arm tactics to yield technology-sharing or other arrangements beneficial to domestic industry.

The government, defending its regulatory scrutiny as even-handed pointed to a history of Qualcomm and Microsoft facing similar antitrust probes in western countries.