The world's largest chip maker Intel Corp will continue to invest in China as it expects the country to be the first nation to come out of the global economic slowdown.

"We are going ahead with our Dalian investments and we are not backing away," said Sean Maloney, Intel's executive vice-president. He said the Chinese government's economic stimulus is expected to unleash massive infrastructure construction projects in the coming years, which will open up huge opportunities for the company.

Ian Yang, chief executive of Intel China, said chip demand in the mainland during the first four months of this year have outpaced most other countries, which may be the sign of a market recovery.

"China is more sensitive than other countries to the market change," said Yang, noting that Intel's growth in China has already seen a slowdown early last year due to the impact of a series of natural disasters and the Beijing Olympic Games.

In order to boost its presence in China, Intel announced in 2007 plans to invest $2.5 billion to build a 300mm wafer fabrication plant in Dalian. But as the financial crisis has significantly scaled down global chip demand, many are worried that the new plant may provide a surplus capacity for the US company.

Maloney said Intel would not stop investing because "companies don't get out of the recession by cutting".

According to Semiconductor Industry Association, global chip sales fell by about 30 percent in February as demand for products such as personal computers and mobile phones plunged. The organization predicts that chip demand will remain at the 2008 levels for the next few quarters before a gradual recovery takes hold.

Maloney said the main job for technology firms in the current economic recession should be to "get everybody connected". "You can't predict the future growth industries, but you know in some way or the other that they are going to revolve around the Internet."

He said notebooks, rather than "netbooks", will become the key product that would lead computer makers out of the woods.

Intel announced in February plans to close a plant in Shanghai as part of its measures to streamline manufacturing operations in China. The company also said it would inject $110 million into Intel China Ltd, the company's investment holding company.

Intel said yesterday it would increase its staff strength of 500 employees in Dalian to about 2,000 by 2010 when its new plant starts operations.

(China Daily April 29, 2009)