Intel Corp has started building a $2.5-billion chip factory in China at the weekend, expanding its foothold in the world's second largest personal computer market.

Called Fab 68, the new factory will start operation in 2010 and become the world's largest computer chipmaker's first 300mm wafer fabrication plant in Asia and eighth globally.

The factory in Dalian, in Northeast China's Liaoning Province, is one of the largest foreign investments in China.

"Fab 68 will have world-class infrastructure and be an integral part of our global manufacturing network and bring us closer to our customers and partners in China," Intel Chairman Craig Barrett said on Saturday.

"Besides bringing advanced chipset manufacturing, Intel's presence will help attract investment from other segments of the integrated circuit industry to the city," Dalian Mayor Xia Deren said.

The chip manufacturing plant will help attract more than 100-billion yuan ($13.27 billion) in investment to the port city, which is trying to boost the growth of its IT sector, Xia said.

Fab 68, announced in March this year, is expected to use 90-nanometer technology to make computer chipset, which is the most advanced technology approved by the US government for export to China.

Currently, Intel makes most of its advanced microprocessors with 65-nanometer technology and plans to begin production on next-generation 45-nanometer technology in the second half of this year.

"It's our intention to keep this factory as advanced as the US export law allows," factory general manager Kirby Jefferson said. The company will keep upgrading its facility as US regulations change.

Intel has set up two assembly and test plants in Shanghai and Chengdu, along with research and development centers and labs in Beijing, Shanghai and other Chinese cities.

(China Daily September 10 2007)