Intel Corp will invest up to $5.5 billion in
manufacturing semiconductors in China, stepping up efforts to improve ties with
Beijing as it seeks new revenue streams while demand for its core computer
processing chips falters.
The U.S. firm said it would convert a facility in
Dalian, its first plant in China, for memory chip production. It didn't
disclose a time period for the investment, but said it will start making
advanced memory chips that can store data without using up power, called 3D
NAND chips, in second-half 2016.
The move follows a flurry of deals in the global
semiconductor industry, highlighting growing importance of the memory chips
used to store data in increasingly popular mobile devices. Researcher
TrendForce predicts China will consume $6.67 billion worth of NAND chips this
year, or 29 percent of global NAND industry revenue.
Building a chip industry of its own has been deemed of
strategic importance by China in its drive to modernize its economy. Intel's
new investment follows a deal last year to buy 20 percent stake of two mobile
chipmakers owned by state-backed Tsinghua Holdings Co Ltd.
Intel's latest move raises concerns that new memory
supply from the chipmaker could undercut margins for leading industry players
like South Korea's Samsung Electronics Co Ltd and SK Hynix Inx, and Japan's
Toshiba Corp.
source: reuters
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