China Authorizes Intel to Build Chip Plant in Northeastern City

March 13, 2007 at 12:27 pm | Posted in China, 科技, 經濟, 经济, 美国, 美國, Economics, News, Politics, Technology, United States, 政治, 新聞, 新闻, 中国, 中國 | 6 Comments

intelfabplant

Jason Dean in Beijing & Don Clark in San Francisco, Mar. 13 2007 WSJ

China’s government said it approved plans by Intel Corp. to build an advanced semiconductor plant in the country, an project that — if it proceeds — would mark a major step for China’s efforts to attract high-technology investment.

An Intel fab would be a triumph for China in its decades-long campaign to develop a semiconductor industry. The government hopes that foreign investment will promote the development of domestic chip companies, enabling China to eventually wean itself from expensive imported technology…

The U.S. Department of Commerce sets complex restrictions governing exports to China of advanced equipment for making chips. Some of the rules require several government agencies to review and approve exports of manufacturing gear that can make chips with dimensions of 180 nanometers or less. An Intel factory with 90-nanometer circuitry would be two generations of production technology beyond those limits…

For Intel, whose chips are mainly used in personal computers, a fab in China would put it closer to one of the most important markets for its products. China is now the world’s second-biggest market for personal computers after the U.S. by unit sales, as well as the place where many PCs are manufactured for markets outside China…

Out of all seriousness, I think there’s a very simple solution to Intel’s problems described above. Build the plant in Taiwan.

Most of Intel’s chips are used for personal computers, which are for the most part manufactured and assembled in China. However, Intel must also be aware that most of its customers within China who manufacture and assemble these personal computers are foreign owned, namely by Taiwanese companies, such as Foxconn, Quanta, Wistron, Compal, and others. Typically, these Taiwanese companies rely on their subsidiaries in China to provide the necessary labor while key components are manufactured in Taiwan and exported to China. To reduce costs, Intel can easily make arrangements with these Taiwanese companies to have its chips shipped to China along with those key components mentioned above.

Most importantly, having the plant in Taiwan would not be viewed by politicians as a threat to the United States since the two countries are implicit allies when it comes to potential conflicts with China. Furthermore, Intel would not have to run the risk of aiding in the development of potential competitors since Taiwan already has champion chip makers, such as TSMC and UMC. Lastly, Taiwan’s better structured and enforced IPR would better protect Intel’s investments and guarantee its longterm success.

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  1. Wouldn’t building in Taiwan negate much of the cost savings?

  2. That’s true. But if the U.S. Department of Commerce refuses to lift its restrictions concerning the export of chip technology to China, Taiwan would be the most logical alternative. Judging by the government’s reactions to CNOOC’s takeover bid for Unocal back in 2005, it should be evident that politics may easily and most likely will get in the way of Intel’s investment decisions.

  3. In Washington, the concern on Capitol Hill in recent years has chiefly been with Chinese investments coming into the U.S., such as the failed attempt a few years ago by a Chinese government-backed company to buy U.S. oil assets. Uproar in Congress helped undermine that deal.

    The Intel investment is fundamentally different, involving outbound U.S. investment, and so far has attracted little attention among politicians. But in the current political climate, there is always a risk that U.S. lawmakers may raise alarms once the deal gains wider attention. Of concern would be the potential risk of transferring to China civilian technologies that could be adapted for military use, or that might eventually put U.S. companies at a long-term competitive disadvantage.

    “This merits a hard look to understand what capabilities and what technologies are being transferred,” said Michael Wessel, a member of U.S.-China Economic and Security Review Commission, a congressionally chartered panel. The key issues, Mr. Wessel said, are how does the deal “advance China’s economic and security interests, and what impact that would have on our own country.”

    Mar. 22 2007 WSJ

  4. The plant will give Intel, which has been losing market share to Advanced Micro Devices Inc., better access to computer factories in China, the world’s biggest market for chips. The decision also may boost China’s reputation among other chipmakers as some companies have been slow to invest on concern over intellectual-property theft, analysts say.

    “This definitely helps to improve China’s position from a global perspective,” said Jim McGregor, an analyst for research company In-Stat in Scottsdale, Arizona. “Intellectual property is probably the last major hurdle.”

    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.”

    “It’s a milestone for China,” said Albert King, chief investment officer at Prophet Capital Inc. in Taipei, whose $10 million in funds includes Intel shares. “It says to the world `we think it’s very safe and we think it’s about time to invest.”

    Mar. 26 2007 Bloomberg

  5. This is absolutely absurd.

    China is arming themselves to the teeth with the money our country spends buying their crappy goods.

    China has spied on the US constantly. Has stolen jet designs, nuclear weapon designs, missile designs, and whatever else we havent caught them at. Rammed one of our spy planes to boot and ended up stealing all the technology out of it.

    The Chinese military are allowed to observe our military exercises. Learning our tactics and weaknesses. You think they’d reciprocate? Of course not.

    Now Intel wants to teach them chip making technology?

    Really smoooth move. China is NOT the US’s friend. Never was, never will.

    Opinions will change when China finally does invade Taiwan and sinks a carrier fleet or two while at it. Or we just sit idly by and watch it happen cause we no longer have the techonological advantage we need to defeat the Chinese.

    In order to negate the numerical superiority of the Chinese military. The US must have a decisive advantage in technology and tactics.

    Crap we let them see our tactics, and give them the technology they need.

    They don’t need technology equal to ours either. The Chinese need just enough to make any military actions on our part costly ones. Time is on their side…

  6. hi mark. you should consider writing to your congressman.


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