I did some research on the semiconductor sector a couple years ago. At the time, our largest plants were Intel’s in Flagstaff and Samsung’s in Austin. Both were undergoing multi-billion dollar expansions.
In what is seen by many as a politically significant shift in strategy towards high-tech exports, the move into the growing Chinese market looks set to ruffle some feathers in Washington.
The Financial Times reports that Congress is said to be concerned by China’s growing influence on the US economy.
The plant is the first of its kind in Asia and will be located on the coastal city of Dalian with up to 1,500 workers expected at the site.
Intel is said to have gained a US export licence to manufacture older technology chipsets with circuit widths of 90 nanometres, despite some political opposition.
US rules normally restrict the export of technology that has potential military capabilities.
Speaking about the new wafer fabrication plant, technology analyst Rob Enderle told the Financial Times: “You’ve got to assume what they put in there will probably not be 90nm. That is just to get them started. What they will end up building will be more advanced.”
Intel already makes 65nm processors and is expected to reduce sizes to as little as 32nm by the time the Dalian plant begins production in the first half of 2010.
Negotiations between Chinese officials and the world’s largest semiconductor maker took several years before the plant was formally given the go ahead in February this year.
An announcement confirming the deal was made at a news conference in Beijing last night. ®
So? What does that prove about the strength of the semiconductor business in the US? Two new plants built in the US does not mean didlly squat. We are actually losing markey share to other countries and China leads us in production.
China became the world's biggest chip market in 2005, after passing the Americas region. Sales of chips to the country will rise to US$111 billion in 2011, from US$39 billion in 2005, according to Scottsdale, Arizona-based IC Insights Inc. Intel ``will be bringing in fairly advanced technology to China, more than any manufacturer there has,'' said Len Jelinek, an analyst for El Segundo, California-based iSuppli. ``Once you put one manufacturer there with those capabilities, others will look at it, especially being that it's Intel.'
'Samsung’s quest for a new plant location tested Austin’s ability to compete with other high-tech cities and even other countries, as most new semiconductor plants are now being built in Asia. In April, Samsung made its final decision and chose Austin. Its new $3.5 billion plant will employ about 700 people directly and another 200 indirectly from supplier companies